USDA Income Limits

How Income Limits Are Calculated

USDA sets income limits at 115% of the area median household income (AMI) for each county or metropolitan statistical area. The limits are adjusted for household size: larger households receive higher thresholds. USDA publishes separate limits for 1-4 person households and 5-8 person households. The limits are updated annually, typically using data from the U.S. Census Bureau's American Community Survey.

What Counts as Household Income

USDA income eligibility is based on total household income, not just the borrower's income. This includes income from all adult members of the household, whether or not they are on the mortgage application. Wages, self-employment income, Social Security, disability, child support, and other regular income sources are all counted. This is broader than most loan programs, which only count the income of applicants on the loan. A household where two adults earn modest salaries may exceed USDA limits even if one person's income alone would qualify.

How to Check Eligibility

The USDA provides an online income eligibility tool at the Rural Development website where borrowers can enter their state, county, and household size to see the current limits. Income limits vary significantly by location. High-cost areas may have limits above $100,000 for a family of four, while lower-cost rural areas may have limits closer to $75,000. Borrowers should check the specific limit for their county before assuming they do or do not qualify.

Adjusted vs. Actual Income

USDA allows certain deductions from gross income when calculating eligibility, including childcare expenses for children under 12, care of household members with disabilities, and medical expenses for elderly household members exceeding 3% of gross income. These deductions can bring a household that appears over the limit back under it. The adjusted income figure, not the gross household income, is what USDA uses for the final eligibility determination.