In Practice
Area median income, or AMI, is the household income at the exact middle of an area, so half of households earn more and half earn less. HUD publishes it each year for every metro area and county, adjusted for household size. Affordable housing programs use AMI percentages such as 30, 50, 60 and 80 percent to set who can qualify and what rent can be charged.
On-site, you see AMI in the income limit chart that sits next to every application. A household qualifies if its annual income is at or below the limit for its size and the program's set percentage. Programs often group households as extremely low, very low, low and moderate income based on those percentages. Charts update every year, usually in the spring, so the team needs to switch to the new limits on the right effective date.
Example: an area has a four-person AMI of $90,000. A unit restricted to 60 percent AMI would have an income limit of $54,000 for a four-person household. Numbers like these are illustration only, so always use the published chart for your county and program.
The common mistakes are using last year's chart, using the wrong household size, using the wrong program's limits, and mixing up AMI with the income that a specific household reports. Your agency or lender can confirm which chart applies. Rules differ by program, so check the program's rules or your compliance contact.
How an income limit works
Take the published AMI for the household size, then multiply by the program percentage. Example: if the four-person AMI is $90,000 and the unit is set at 60 percent, the limit is $90,000 x 0.60 = $54,000. Use your agency's published chart, since the real figures differ by county and year.
Area Median Income: Common Questions
What does 60 percent AMI mean?
It means a household's income can be no higher than 60 percent of the area median income for its household size. Rents in those units are limited too.
Who sets area median income?
HUD publishes the figures each year for metro areas and counties, and programs apply them to their own rules.
Is AMI the same as the average income in an area?
No. AMI is the median, the midpoint, not the average. Half of households earn more, and half earn less.
