What Is 60% AMI and How Do You Qualify?

Area Median Income (AMI) serves as a fundamental financial metric, representing the midpoint of income distribution within a specific geographic area. This means half the households in that region earn more than the AMI, and half earn less. The concept of “60% AMI” is a widely recognized benchmark derived from this figure, frequently used to determine eligibility for various assistance programs.

Understanding Area Median Income

The U.S. Department of Housing and Urban Development (HUD) annually calculates Area Median Income (AMI) for metropolitan and non-metropolitan regions across the country. AMI functions as a standardized measure for income levels specific to a geographic area, providing a consistent way to assess economic need. It helps ensure that programs designed to assist individuals are tailored to the economic realities of their particular locality.

AMI represents the statistical midpoint of a region’s household income, meaning that precisely half of all households in that area earn more than this figure, while the other half earn less. HUD adjusts these AMI figures based on household size to account for the varying financial needs of different family structures. As the number of individuals within a household increases, the corresponding income threshold for AMI also rises, reflecting the greater expenses associated with larger families.

Determining Your 60% AMI Threshold

The “60% AMI” threshold represents an income level that is 60% of the Area Median Income for a specific region and household size. For instance, if the AMI for a four-person household in an area is $80,000, then 60% AMI for that household size would be $48,000.

To determine your specific 60% AMI threshold, you can access official AMI data directly from the HUD website, specifically through their HUD User web portal. Local housing authority resources also often provide this information. These online tools typically allow you to select your state and county, presenting a table that identifies income limits for various household sizes at different AMI percentages, including 60%.

Calculating your own income for comparison to the AMI threshold generally involves determining your gross annual household income. This includes income from all sources for every member of your household, such as wages, salaries, bonuses, and tips. It also encompasses gig work earnings, unemployment benefits, disability payments, worker’s compensation, severance pay, and investment income like stock dividends. Most benefits received by any adult or child in the household are typically included in this calculation.

Certain types of income are commonly excluded from this calculation. Income earned by children under 18 years old is generally excluded, although these children still count towards the household size. Recent updates from HUD have also mandated the exclusion of specific tax refunds, distributions from ABLE accounts, and emergency rental assistance payments. Non-recurring income that is not expected to be received in the coming year is typically disregarded as well.

Common Applications of 60% AMI

The 60% AMI threshold is a widely used benchmark for programs assisting low-to-moderate income individuals and families. This income level serves as a common eligibility criterion across various federal, state, and local initiatives. Programs aim to prevent households from spending more than 30% of their gross income on housing costs, including utilities.

A frequent application of 60% AMI is in affordable housing initiatives, such as those supported by Low-Income Housing Tax Credits (LIHTC). These programs often reserve rental units or provide homeownership assistance for households whose incomes fall at or below this percentage of the AMI.

Rental assistance programs utilize the 60% AMI threshold to determine eligibility for housing subsidies or priority for certain housing opportunities. Energy assistance programs, such as the Low-Income Home Energy Assistance Program (LIHEAP), often use 60% of the State Median Income (SMI) for eligibility. Various community development grants and basic systems repair programs may also set their eligibility at or around the 60% AMI level.