What Is HUD Median Income?

The HUD median income is an estimate from the Department of Housing and Urban Development (HUD) that indicates how much a family in a given area earns on average. The income limits set by the HUD will determine an applicant’s eligibility for HUD’s assisted housing program.

The HUD income limits are calculated for every Fair Market Rent (FMR) area with adjustment based on the size of a family and for areas that show unusually low or high income-to-housing-cost relationships. Definitions outlined in Section 8 FMR are used to develop median family income estimates for non-metropolitan counties, metropolitan areas, and some part of metropolitan areas.

  • Families with incomes that do not exceed 80% of an area’s median family income are defined as low-income families.
  • Families with incomes that do not exceed 50% of an area’s median family income are defined as very low-income families.

If your household income is low and you are seeking a mortgage, the median household income will help determine your eligibility for low to moderate mortgage loans or the Community Reinvestment Act. Some lenders offer a special mortgage that is dependent or partially dependent on the household median income.

If you mention this to the banker or broker upon your mortgage application, you may benefit from a lower down payment, lower interest rate or mip/pmi, and assistance for closing costs and grant money.

 

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