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Income Limits Clarified

Written by Lois Churchill, Spectrum Enterprises

(This is a clarified version of a blog posted in December because we are still receiving a lot of questions about income limits when they go down.)

 The 2013 income limits went into effect for all programs except HOME on 12/4/12. You must have started using them no later than 1/18/13. HOME limits for 2013 have not yet been published, therefore 2012 limits remain in place for that Program.

 More and more counties are seeing income limits go down for the first time and we are receiving calls asking if the new limits must be used. Here’s our answer:

  1. Remember when determining the income limit for a particular unit that you must use the most restrictive. If the unit has more than one program attached and one is lower than the other, using the lower will keep you in compliance with all programs.
  2. In 2010 tax credit projects were given “hold harmless” provisions regarding income/rent limits. The best way to figure out what limits must be used is by referring to the chart below the limits that appears on the MTSP income limits page (see first link below).

For example, Los Angeles County, California gives these instructions:

                Placed in Service Date on or before 12/31/2008, use FY2011 limits

                Placed in Service Date 1/1/09 to 5/13/10, use FY2011 limits

                Placed in Service Date 5/14/10 to 5/31/11, use FY2011 limits

                Placed in Service Date 6/1/11 to 11/30/11, use FY2011 limits

Placed in Service Date 12/1/11 to 12/3/12, use FY2012 limits (apparently higher but not higher than 2011 limits)

Placed in Service Date 12/4/12 to Present, use FY2013 limits

NOTE: The MTSP site actually uses 12/10/12 as the end date for 2012 limits and 12/11/12 as the start date for 2013 limits but the IRS has clarified that they consider the new limits to have been put into effect on 12/4/12. They must have been put into place no more than 45 days later, so 1/18/13 was the drop dead date.

Income limits for tax credit properties are available at http://www.huduser.org/portal/datasets/mtsp.html. HOME income limits are available at www.hud.gov/offices/cpd/affordablehousing/programs/home. HOME rent limits are also available at that location.

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