Housing

If you’ve ever tried to apply for a low-income apartment and felt stuck on the income section, you’re not alone. Most applicants don’t get denied because they “did something wrong”—they get delayed or disqualified because income limits, household size rules, and documentation requirements are confusing.

This guide explains, in plain English, how income limits typically work (especially for LIHTC-style income-restricted apartments), what usually counts as income, how household size is defined, and how to prepare your paperwork so you don’t lose your place in line.

Overview: What Is AMI and Why Does It Matter?

AMI stands for Area Median Income. It’s a local benchmark used to set income limits and rent caps for many affordable housing programs. AMI differs by:

  • City or county (depending on the program)
  • Household size (1 person vs 4 people)
  • Program targeting (common tiers include 30%, 50%, 60%, and 80% AMI)

When you see a listing like “60% AMI” or “Income Restricted,” it usually means the apartment has a maximum household income. If your household income is higher than that limit, you may not qualify—even if the rent looks affordable.

Common AMI Tiers You’ll See

Affordable apartments often advertise eligibility using AMI percentages. Here’s what those tiers usually mean:

  • 30% AMI: Very low income (often the hardest to get, highest demand)
  • 50% AMI: Low income
  • 60% AMI: Common for many LIHTC communities
  • 80% AMI: Moderate income (sometimes called “workforce housing”)

A single property may have multiple set-asides. For example, a building could have some units at 50% AMI and others at 60% AMI. That’s why two neighbors in the same building might pay different rents for similar units.

Household Size: Who Counts in Your Household?

Household size is one of the biggest drivers of your income limit. Generally, your household includes everyone who will live in the unit as their primary residence.

Common examples that typically count:

  • Adults and children living in the unit full-time
  • Newborns or expected children (some programs allow counting a pregnancy or pending adoption—policies vary)
  • Live-in aides (in certain situations, documented and approved)

Common examples that typically do not count (or are treated differently):

  • Temporary guests
  • Roommates who won’t be on the lease
  • People who live elsewhere most of the time (rules vary by program and property)

Tip: Don’t guess. Ask the leasing office: “Who will you count as household members for income certification?” If your situation is complicated (shared custody, split households, a live-in aide), get the answer early.

What Counts as Income (Most Common Categories)

When properties verify income, they usually look at gross income (before taxes), and often they project it forward for the next 12 months. Income can include more than just wages.

Here are common categories that often count:

  • Employment income: hourly wages, salary, overtime, bonuses, commissions
  • Self-employment income: net business income, contractor work, gig platforms
  • Benefits: Social Security (SSI/SSDI), unemployment, worker’s comp
  • Support payments: child support, alimony (if received consistently or ordered)
  • Pensions and retirement distributions
  • Regular cash contributions: money you receive routinely from family or others to help pay bills (often overlooked)

Income rules can differ by program type. Some properties include certain sources while others treat them differently. If you’re unsure, disclose it and ask how to document it. It’s safer than leaving something off and getting flagged later.

Assets vs Income: Why Bank Statements Matter

Many affordable housing programs review assets (like savings accounts) in addition to income. Assets may affect eligibility in two ways:

  • They may require documentation even if they don’t push you over an income limit.
  • They can generate “imputed income” in some programs if assets are above certain thresholds (rules vary).

Assets can include:

  • Checking and savings accounts
  • Retirement accounts (401(k), IRA)
  • Stocks, bonds, crypto (in some programs)
  • Trusts or ownership interests
  • Real estate ownership

Tip: Don’t panic if you have savings. Having money in the bank doesn’t automatically disqualify you. The bigger issue is usually missing documentation or unexplained transfers.

How Properties Calculate Income (Simple Examples)

Most properties annualize income—meaning they estimate what you will earn over the next 12 months based on current information.

Example 1: Hourly job
If you earn $18/hour and usually work 35 hours/week, they may calculate:
18 × 35 × 52 = projected annual income.

Example 2: Variable hours or tips
If your hours fluctuate, they might use an average based on recent pay stubs (for example, the last 8 weeks) and annualize that average.

Example 3: Two adults working
They typically combine income from all household adults. If one person has irregular gig income, expect additional questions and documentation.

Example 4: New job offer
If you’re starting a new job next month, the property may use the offer letter to project income. Some offices will request employer verification after you start.

The “Student Rule” (Why Some Applicants Get Surprised)

Some income-restricted programs have restrictions for full-time student households. This rule can be tricky and exceptions may apply (for example, certain single-parent households or people in specific programs), but the key takeaway is:

  • If everyone in the household is a full-time student, eligibility may be restricted unless an exception applies.
  • If only one household member is a full-time student, it may be fine, but documentation may still be required.

Tip: If you are a student (or your household is), tell the leasing office up front. Don’t wait until the final certification stage.

Documents You’ll Almost Always Need

For income verification, most leasing offices will request:

  • Pay stubs (often 4–8 weeks)
  • Employment verification (a form or a verification call/email)
  • Benefit award letters (SSI/SSDI/unemployment, etc.)
  • Bank statements (often 2–3 months; sometimes all pages)
  • Tax returns (common for self-employment)
  • Proof of child support if applicable (court order + payment history)

If you’re self-employed or do gig work, expect the most questions. A clear profit-and-loss statement and consistent bank deposits can help.

Top 10 Mistakes That Cause Delays or Denials

  • 1) Missing pages of bank statements (even “intentionally blank” pages may be required)
  • 2) Uploading blurry photos that hide account numbers, dates, or names
  • 3) Not explaining irregular deposits (cash apps, transfers, family support)
  • 4) Using inconsistent names (nickname on one document, legal name on another)
  • 5) Underreporting variable income (overtime, tips, commissions)
  • 6) Forgetting secondary jobs or seasonal employment
  • 7) Not responding quickly to verification requests
  • 8) Listing household members incorrectly (or not clarifying custody arrangements)
  • 9) Assuming eligibility based on last year’s income instead of projected annual income
  • 10) Applying to only one property and waiting months without backups

Practical Strategy: A Simple “Eligibility Checklist” You Can Use

Before you apply, try this workflow:

  • Step A: Confirm the property’s AMI tier and household-size limit.
  • Step B: Estimate your projected annual income for the next 12 months.
  • Step C: Gather your documents (pay stubs, bank statements, benefit letters, IDs).
  • Step D: Write short explanations for anything unusual (job change, variable hours, one-time deposit).
  • Step E: Apply to multiple properties and track each application date and contact.

Even if you are not 100% sure how the property will calculate your income, coming prepared and communicating early will usually speed things up.

Frequently Asked Questions

Do I need to be “below the limit” at the time of application?
Usually yes. Most properties certify based on current and projected income at the time they process your file and offer a unit.

What if my income changes after I move in?
Many programs require annual recertification, and some require reporting changes sooner. Rules vary, so ask the property what they require.

If I’m right near the income limit, should I still apply?
Yes, but be ready with clean documentation. If overtime or bonuses push you over, the property may determine you’re ineligible. Still, different properties and unit set-asides can have different limits.

Conclusion: Make Income Rules Work for You

Income limits aren’t meant to trick you, but the paperwork and definitions can be strict. The best approach is to treat the application like a compliance process: disclose income sources clearly, keep documents organized, respond quickly, and apply broadly. If you do that, you’ll avoid most delays and dramatically improve your odds of getting approved when a unit becomes available.