FY 2009 Income Limits Documentation System

Median Family Income Calculation Methodology

FY 2009 estimates again take advantage of the 2006 American Community Survey (ACS) data published from the Bureau of the Census. While HUD's FY2008 median family income (MFI) estimates are still updates of 2000 Census data, the 2008 HUD update factors are similar to the methodology employeed to generate FY2007 update factors. In general:

FY2008 estimates are based on local area ACS 2006 surveys for places of 65,000 or more, where such surveys have been published.
Estimates for all other areas now reflect the state-level change between the 2000 Census state and 2006 ACS state estimates, rather than being based on applying ACS changes (e.g., 2000-2004 for FY2006 estimates) to 2000 Census estimates.

HUD's FY 2009 MFI estimates make more extensive use of ACS data than previously, although local Bureau of Labor Statistics (BLS) wage data continue to be used to influence estimates for areas of less than 65,000 in population. All estiamtes are projected forward from 2006 to April 1, 2008, using an annual trend factor of 3.5 percent. Except for minor modifications, HUD continues to use the same area definitions used in FY2006.

Comparisons between FY2007 HUD median family incomes and FY2008 median family incomes are valid as indicators of local median family income changes. Overall there are increases in family incomes between these two years.

Due to it's size, $inputname$ does not have published local area 2006 ACS Survey results.

The step-by-step normal procedures used to develop FY 2009 estimates for $inputname$ are as follows:

The 2000 Census was used to estimate what are treated as mid-1999 local median family income estimates.
Census 2000 and 2006 American Community Surveys were used to estimate the change in State MFIs for the mid-1999 to end-2006 period. The state income changes for 1999-2006 period were calculated as follows:

ACS State MFI ₂₀₀₆

Census State MFI ₁₉₉₉
=
7-Year Increase factor for

ACS Median Family Income
= ACS State Income Change

NOTE: For areas not covered by local ACS income estimates, trending for the post-2000 period through the year of the most current ACS data available (2006) was done using changes in ACS state MFI estimates. Therefore, in the FY 2008 HUD MFI estimates, HUD is using direct comparisons between the state estimates from the 2000 Census and the 2006 ACS to calculate state-level changes.
State and Local (metropolitan areas and nonmetropolitan counties) BLS average wage changes for all employees for the 1999-2005 period were calculated:

BLS WAGES₂₀₀₆

BLS EMPLOYEES₂₀₀₆

BLS WAGES₁₉₉₉

BLS EMPLOYEES₁₉₉₉

= 7 Yr BLS Wage Increase Factor = BLS Average Wage Change
Local area update factors were derived using local BLS average wage changes in conjunction with state-level Income changes. They were combined according to the results of HUD research done on the determinants of income change between 1990 and 2000.
(17% * Local BLS Average wage change) + (83% * ACS State Income Change) = Local Update Factor
A state-level factor was generated by computing the employee-weighted average of the local area BLS wage change data for the state and adding the same proportion of the ACS state income change, as follows:
(17% * State Weighted Average Local BLS wage changes) + (83% * ACS State Income Change) = State Update Factor
A state ACS control factor was developed that adjusted for differences between the aggregated results of the step 5 local update factors and the actual Census-ACS state-level change factor for the same period. This was done as follows:
ACS State MFI₂₀₀₆

Census State MFI₁₉₉₉
State Update Factor

(from step 5)
= State Control Factor
NOTE: Changes in BLS-reported average wages, even though they are a component of family income, are not a direct measure of changes in family income and require adjustment if being used for that purpose.
Local area update factors were adjusted with the state control factor as follows:
Local update factor (step 4) * State control factor (step 6) = Adjusted local update factor
Convert the step 1 median family income estimate to an April 1, 2008 estimate as follows: Step 1 median family income
* Step 7 Adjusted Local Update Factor
* 1.035 (3.5% annual trending) ^{1.25 years}
= FY 2008 Median Family Income estimate

Although HUD is revising its median family income estimates to use the new ACS data, it is continuing its hold-harmless policy with respect to income limits. That is, HUD will continue to set income limits at the higher of normal income limit calculations or at the previous year's income limits.

The results of the Median Family Income Step by Step Process

$inputname$ Results

ODBscript Error: Non-numeric expression: (null) * 1.005952
[Error in file 2008MedCalc.odn line 343]

ODBscript Error: Non-numeric argument for round()
[Error in file 2008MedCalc.odn line 343]

ODBscript Error: Non-numeric expression: (null) / (null)
[Error in file 2008MedCalc.odn line 344]

ODBscript Error: Non-numeric expression: (null) / (null)
[Error in file 2008MedCalc.odn line 345]

ODBscript Error: Non-numeric expression: (null) * 100
[Error in file 2008MedCalc.odn line 345]

ODBscript Error: Non-numeric argument for round()
[Error in file 2008MedCalc.odn line 346]

ODBscript Error: Non-numeric expression: 0 / 0
[Error in file 2008MedCalc.odn line 358]

ODBscript Error: Non-numeric expression: (null) / 100
[Error in file 2008MedCalc.odn line 375]

ODBscript Error: Non-numeric expression: (null) * 0.172089
[Error in file 2008MedCalc.odn line 376]

ODBscript Error: Non-numeric expression: (null) * .83
[Error in file 2008MedCalc.odn line 377]

ODBscript Error: Non-numeric expression: (null) * 0.171012
[Error in file 2008MedCalc.odn line 378]

ODBscript Error: Non-numeric expression: (null) * .83
[Error in file 2008MedCalc.odn line 378]

ODBscript Error: Non-numeric expression: (null) + (null)
[Error in file 2008MedCalc.odn line 378]

ODBscript Error: Non-numeric expression: (null) * .17
[Error in file 2008MedCalc.odn line 379]

ODBscript Error: Non-numeric expression: (null) * .83
[Error in file 2008MedCalc.odn line 380]

ODBscript Error: Non-numeric expression: (null) * .17
[Error in file 2008MedCalc.odn line 381]

ODBscript Error: Non-numeric expression: (null) * .83
[Error in file 2008MedCalc.odn line 381]

ODBscript Error: Non-numeric expression: (null) + (null)
[Error in file 2008MedCalc.odn line 381]

ODBscript Error: Non-numeric expression: (null) / (null)
[Error in file 2008MedCalc.odn line 382]

ODBscript Error: Non-numeric expression: (null) * (null)
[Error in file 2008MedCalc.odn line 383]

ODBscript Error: Non-numeric argument for round()
[Error in file 2008MedCalc.odn line 383]

ODBscript Error: Non-numeric expression: (null) / 100
[Error in file 2008MedCalc.odn line 387]

ODBscript Error: Non-numeric argument for round()
[Error in file 2008MedCalc.odn line 387]

ODBscript Error: Non-numeric expression: (null) * 1.04394
[Error in file 2008MedCalc.odn line 388]

ODBscript Error: Non-numeric expression: - (null)
[Error in file 2008MedCalc.odn line 391]

ODBscript Error: Non-numeric argument for abs()
[Error in file 2008MedCalc.odn line 391]

The following are the 2000 Census Median Incomes (as of 1999) for:

Area 2000 Census Median Income

,
The state-level income change from mid-1999 to end-2006 is calculated as follows:

Area ACS State MFI₂₀₀₆ Year End 2006 Update Factor Census State MFI₁₉₉₉ Result

, (202.8 / 201.6)
=
1.00595 (*1.00595) /
=
/
=

=
%
BLS wage and employee information from 2006, 1999 and the calculated ratios follow:
Due to a lack of local area BLS data, a national surrogate is used. The value used is %.

Area	2000 Census Median Income
,

Area	ACS State MFI₂₀₀₆	Year End 2006 Update Factor	Census State MFI₁₉₉₉	Result
,		(202.8 / 201.6) = 1.00595		(*1.00595) / = / = = %

Local Area Update Factors are calculated as follows:

Area	Local BLS Average Wage Change	2005 Year End Update Factor	ACS State Income Change	Result
,		(202.8 / 01.6) = 1.00595		(17% * * 1.00595) + (83% * ) = (+) = %

State Level Update Factors are calculated as follows:

Area State Weighted Average
Local BLS Wage Change ACS State
Income Change Result

, (17% * ) + (83% * )
=
( + )
=
%

Area	State Weighted Average Local BLS Wage Change	ACS State Income Change	Result
,			(17% * ) + (83% * ) = ( + ) = %

State ACS Control Factors are as follows:

Area	ACS State MFI₂₀₀₆ from step2	Census State MFI₁₉₉₉ from step2	ACS State MFI₂₀₀₆ / Census State MFI₁₉₉₉ step2 result	State Update Factor step5 result	Result
,			%	%	/ =

Adjusted Local Update Factors are as follows:

Area Local Update Factor
Step 4 State Control Factor
Step 6 Result

, % ( * )
=
%

Area	Local Update Factor Step 4	State Control Factor Step 6	Result
,	%		( * ) = %

The FY 2009 median family incom is estimated as follows:

Area	Step 1	Step 7 Adjusted Local Update Factor	Trending 3.5% for 1.25 years	FY2009 Area MFI Estimate
,			1.035^1.25 = 1.043940	( * * 1.043940) = 1.04

In keeping with HUD policy, the MFI Estimate is rounded to the nearest $100:

Area Unrounded
FY 2009 MFI Estimate Rounded
FY 2009 MFI Estimate

, $1.04 $0
NOTE: Due to differences in the computing platforms used to generate the official FY 2009 MFI estimates, and this web system, the calculated value of 0 is different that the official value of because of rounding.

Area	Unrounded FY 2009 MFI Estimate	Rounded FY 2009 MFI Estimate
,	$1.04	$0

Problems or questions? Contact Peter.B.Kahn@hud.gov.