On March 28, HUD released Section 8 income limits for 2016. One day later, the complete set of income limits for Multifamily Tax Credit Projects (MTSP) were posted online. The MTSP limits establish tenant eligibility and maximum rents in the Low-Income Housing Tax Credit and tax-exempt multifamily bond programs.
Overall, the MTSP limits were close to flat in 2016. The limits increased for 36% of the 3,173 counties and parts of counties for which HUD publishes MTSP limits. They were unchanged for 6%, and declined for 58%. Existing properties are held harmless, which means that in the case of a decline in 2016, income limits and rents in existing properties are frozen at 2015 levels.
As the above percentages indicate, income limits were frozen in over half the areas in the country in 2016. The general weakness was due not so much to underlying income data, but to the CPI-based adjustment factor HUD uses to bring 2013 median incomes forward to 2016. HUD continues to cap income limits at 5% above or below the previous year’s numbers. As such, more than 100 counties were capped at both ends of the scale in 2016.
A relatively large share of counties in North Carolina experienced the most extreme possible 5% declines, as the non-metropolitan median income declined by more than 6% in that state, affecting all counties where limits are based on the statewide non-metropolitan floor.