Housing programs use three yardsticks that are easy to mix up: what rent costs (HUD fair market rent), how a household compares with local incomes (HUD income limits), and how it compares with a national floor (the poverty guideline). Here they are side by side for three real places.
All figures come from the agencies’ own files: HUD’s FY2027 Fair Market Rents (effective October 1, 2026), HUD’s FY2026 income limits (effective May 1, 2026), and the 2026 HHS poverty guidelines (Federal Register, January 15, 2026). Each has a calculator for your own county and household.
Fair market rent (FMR) answers “what does a modest unit cost here?” It is the 40th-percentile gross rent, including utilities, for each county or metro. Area median income (AMI) limits answer “is this household low income for this area?” They are about 30%, 50% and 80% of the local median family income, adjusted by household size. The federal poverty level (FPL) answers “how does income compare with a single national floor?” It is the same in 48 states, higher in Alaska and Hawaii.
A family of four (two adults, two children) needing two bedrooms:
| Family of four | 2-BR fair market rent (FY2027) | Income to afford it at 30% | Very low limit (50% AMI) | Low limit (80% AMI) | 200% of poverty |
|---|---|---|---|---|---|
| Los Angeles County, CA | $2,964 | $118,560 | $83,300 | $133,250 | $66,000 |
| Cook County, IL (Chicago) | $2,011 | $80,440 | $60,750 | $97,200 | $66,000 |
| Barbour County, AL (rural) | $921 | $36,840 | $37,100 | $59,350 | $66,000 |
The poverty line does not move with local costs: $66,000 (200% of poverty) is comfortably above what it takes to rent at the FMR in Barbour County, but far below what a 2-bedroom costs in Los Angeles County, where the income needed to pay FMR at 30% ($118,560) is close to the 80% low-income limit. In Cook County, the needed income ($80,440) falls between the 50% and 80% limits. The FMR and AMI move together because HUD sets both from local data; the poverty line does not.
| Program | Number it uses | Who sets it | Changes |
|---|---|---|---|
| Housing Choice Vouchers | Fair market rent (payment standard 90-110%) and the 50% income limit | HUD; local housing agency | FMR Oct 1; limits May 1 (FY2026) |
| Public housing | 80% income limit (most admissions at 50% or below) | HUD; housing agency | Each spring |
| Low-Income Housing Tax Credit apartments | 60% (MTSP) income limits and rent caps | HUD MTSP tables; state agencies | Each spring |
| Medicaid, SNAP, school meals, ACA credits | Federal poverty level (138%, 130%, 185%, 400%) | HHS guidelines; each program | Guidelines each January |
| Your own budget | Rent at or under about 30% of gross income | You | Any time |
A Housing Choice Voucher holder generally pays about 30% of adjusted income toward rent and the voucher covers the rest up to the agency’s payment standard, usually 90% to 110% of the FMR. For a family with $30,000 of income (ignoring deductions) and a payment standard equal to the 2-bedroom FMR:
| Place | Tenant share at $30,000 income | Voucher pays up to (payment standard = FMR) |
|---|---|---|
| Los Angeles County, CA | $750 | $2,214 |
| Cook County, IL (Chicago) | $750 | $1,261 |
| Barbour County, AL (rural) | $750 | $171 |
The family’s share is the same everywhere; the subsidy is what changes. That is why voucher waiting lists are longest where FMRs are highest. Before qualifying, the family’s $30,000 must be under the area’s 50% limit, which it is in all three places.
Down-payment assistance and first-time buyer programs often use 80% or 120% of AMI as their cutoff. Once you own, the monthly cost includes taxes and insurance collected through escrow; the escrow calculator shows how that account is figured, and the rent affordability calculator runs the 30% rule for renters.
January 2027: HHS publishes the 2027 poverty guidelines; Medicaid and other programs switch on their own schedules, and 2027 marketplace coverage already uses the 2026 guidelines. Spring 2027: HUD releases FY2027 income limits (FY2026 limits apply until then). October 1, 2027: FY2028 fair market rents take effect. Until each update, use the figures in force: FY2027 FMRs, FY2026 income limits, 2026 poverty guidelines.
Comparing your lease rent (without utilities) with the gross FMR; using the area median instead of the limit for your household size; applying the 48-state poverty table in Alaska or Hawaii; and assuming that “low income” for a housing program means the same thing as “in poverty.” A family of four in Los Angeles County can be low income at $133,250 while being at 404% of the poverty level.
HUD User, FY2027 Fair Market Rents, file FY27_FMRs.xlsx (effective October 1, 2026). HUD User, FY2026 Income Limits, file Section8-FY26.xlsx (effective May 1, 2026). HHS, Annual Update of the HHS Poverty Guidelines, Federal Register document 2026-00755 (January 15, 2026). Electronic Code of Federal Regulations, 24 CFR 982.201 and 982.503 (accessed October 2026). Files downloaded October 22, 2026.
Fair market rent measures what a modest unit costs in an area; area median income measures how much local families earn. Voucher programs use both: AMI limits decide who qualifies, FMR sets how much rent the voucher can cover.
No. HUD’s low-income limit is about 80% of the local median and varies by county; the poverty level is one national figure. In high-cost areas, low income can be several times the poverty line.
Usually 60% (sometimes 50% or 80%) of area median income, from HUD’s separate Multifamily Tax Subsidy Project limits.
Fair market rents each October 1; HUD income limits each spring (FY2026 limits took effect May 1, 2026); poverty guidelines each January.
Divide the yearly FMR by 0.30: a $2,000 monthly FMR needs about $80,000 a year to keep rent at 30% of gross income.
Yes. For 2026 the guideline for four is $41,250 in Alaska and $37,950 in Hawaii, against $33,000 in the other states.