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2017 State Income Limits Briefing Materials California Code of Regulations, Title 25, Section 6932 80 percent of MFI could produce unintended anomalies inconsistent vrith statutory intent_ HUD's briefing, materials specify that, with some exceptions, the low-income limit reflect 160 percent of the very low-income limit. HUD may apply exceptions to areas with unusually high or low housing -costs -to -income relationships. An example of the result from HUD applying an exception.to an area could be an increase to the low-income limit without an increase to the very low-income limit. In sum, an 60 percent limit cannot be assumed to equal 80 percent of the AMI or 4 -person median income limit nor 160 percent of the very low-income limit due to adjustments HUD may make. Median Family Income/Area Median Income HUD references and estimates the MFI in calculating its income limits. California law and income limits reference Area Median Income (AMI) that, pursuant to Health & Safety Code 50093(c), means the median family income of a geographic area estimated by HUD for its Section 8 Program. HUD's calculations of Section 8 Income Limits begin with the production of MFI estimates. FY 2017 MFI estimates use 5 -year survey data (American Community Survey (ACS) 2010- 2014 augmented by 2014, 1 -year ACS. HUD then adjusts the survey data to account for anticipated income growth by applying the Consumer Price Index (CPI) inflation forecast (from federal FY mid -2014 through mid -2017) that the United States Congressional Budget Office published in January 2017. HUD's determination of MFI is used to calculate very low-income limits that are then used as the basis to calculate income limits for other income categories. Adjustment Increases HUD may apply exceptions to areas with unusually high or low family income, uneven housing- cost-to4ncome relationships or historical exceptions_ Very low-income limits are used as the base to calculate extremely low and lovr-income limits. The following reflects HUD's explanations of adjustment increases contained in HUD's FY 2017 Income Limits Briefing Material: HUD applies an increase, 'd the four -person very low-income Emit would otherwise be less than the amount at which 35 percent of it equals 85 percent of the annualized tvo-bedroom Section 8 FMR (or 401' percentile rent in 5W, percentile FMR areas). The purpose is to increase the income limit for areas where rental -housing costs are unusually high in relation to the median income_ HUD applies an increase to the four -person income limit to equal the State non -metropolitan median family income level_ In addition, HUD restricts adjustments so income limits do not increase more than five percent of the previous years very low-income figure OR twice the increase in the national MFI, whichever is greater_ This adjustment does not apply to the extremely low-income limits. Income Limit Calculations forflousehold Sizes Other Than 4 -Persons Income limits for all income categories are adjusted for household size so that larger households have higher income limits than smaller households. For all income categories, income limits for household sizes other than 4 -persons are calculated Pane 3of5 75B-47