Most four-person low-income limits are the higher of: (a) 80 percent of the median family income, or (b) 80 percent of the State non-metropolitan median family income level. Because the very low-income limits are not always based on 50 percent of median, however, calculating low income limits as 80 percent of median could produce anomalies inconsistent with statutory intent (e.g., very low-income limits could be higher than low-income limits). The calculation normally used, therefore, is to set the four-person low-income limit at 1.6 (i.e., 80 percent/50 percent) times the relevant four-person very low-income limit. The two exceptions to this practice are that the four-person low-income limit may not exceed the U.S. median family income ($78,500 for FY 2020) except when justified by high housing costs; and once adjusted, the four-person lowincome limit decrease is limited to five percent or, if increasing, capped at the greater of five percent or twice the national change in median income (which is 7.9 percent for FY 2020). Use of very low-income limits as a starting point for calculating other income limits tied to Section (3)(b)(2) of the U.S. Housing Act of 1937 has the effect of adjusting low-income limits in areas where the very low-income limits have been adjusted because of unusually high or low housingcost-to-income relationships.

Table 2 summarizes the rules governing low-income limit determinations and how many areas are affected by each provision:

Table 2 Summary of Income Limits Determinations for FY 2019 Low-income Limits

	Type Income Limit Calculation	Non-metro Counties	Metropolitan Areas
1	Limits based proportional increases from very low-income limits (i.e., set at 80/50ths of the very low-income limits)	588	307
2	Limits based on State nonmetropolitan median family income level	1236	112
3	Four-person base low-income limit capped at the U.S. median of $75,500	19	39
4	Limits increased for high housing costs	13	31
5	Limits floored if they would otherwise be less than 95% of last year's low-income limit	12	15
6	Limits capped if they would otherwise increase by more than twice the increase in the National Median Income (i.e., would be more than 110% of last year's limit)	105	121
	Totals	1973	625

HUD has adjusted low-income limits for areas of unusually high or low income since passage of the 1974 legislation that established the basic income limit system now used. Underlying the decision to set minimum and maximum low-income limits is the assumption that families in unusually poor areas should be defined as low-income if they are unable to afford standard quality housing even if their incomes exceed 80 percent of the local median family income. Similarly, families in unusually affluent areas are not considered low-income even if their income is less than 80 percent of the local median family income level unless justified by area housing costs.

HUD uses FMRs to calculate high housing cost areas. Beginning with the FY 2020 FMRS, effective October 1, 2019, there are no 50th percentile FMRs; all FMRs are calculated at the 40th percentile.