U.S. Department of Housing and Urban Development HUD Exchange Mailing List

Impact of Recent Changes in Income Limits and Utility Allowances

The new definition of “Extremely Low Income” does not affect ESG recipients/subrecipients

On June 25, 2014, HUD published a Federal Register Notice implementing certain provisions of the 2014 Appropriations Act. Among these is a new provision that applies to the public housing, housing choice voucher, project-based voucher, and multifamily project-based section 8 programs, requiring these programs to use a new definition of “Extremely Low Income (ELI) families.” ELI families are defined as very low-income families whose incomes do not exceed the higher of the Federal poverty level or 30 percent of Area Median Income.

HUD has received questions about whether ELI limits apply to the Emergency Solutions Grants (ESG) or Continuum of Care (CoC) programs. They do not. Under the McKinney-Vento Act, as amended by the HEARTH Act, the definition of “at risk of homelessness” requires that an individual or family’s income be below 30 percent of median family income (or area median income). Further, the ESG Program interim rule limits eligibility for homelessness prevention assistance to individuals and families with incomes below 30 percent of AMI. However, under the ELI standard, an allowable income could actually be higher than 30 percent AMI. Therefore, if ESG recipients/subrecipients were to use the ELI standard, some applicants for ESG assistance might be falsely determined to be eligible for homelessness prevention assistance, when actually their incomes were over 30 percent AMI.

In short, the 30 percent AMI limits are NOT the same as the Extremely Low-Income limits, and ESG recipients and subrecipients MUST NOT use the ELI standard when determining program participant eligibility for homelessness prevention assistance.

However, the tables on HUD User have been updated to reflect the ELI limits, and it is a little more difficult to find the 30 percent AMI limits. For that reason, HUD has posted the 30 percent AMI tables on the HUD Exchange, for ESG recipients and subrecipients to use.

Look for an announcement when the FY 2015 data is available.

Changes in utility allowances may affect ESG and CoC recipients/subrecipients

This Federal Register Notice also addresses a change to a provision of the utility allowance. Because the CoC and ESG Program Interim Rules refer to the use of the utility allowance determined by the PHA, this change could affect the utility allowance used for the CoC and ESG Programs. For more information about this change, please contact either your local PHA or the HUD staff identified as contacts on the Notice.

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