Navigate Down Payment Assistance Income Limits in States: A
Justin Reynolds
Key Takeaways
- Understand AMI and its impact on down payment assistance
- Compare borrower-only vs all adults 18+ for income calculations
- Learn from real-life scenarios tailored to different household configurations
Discover how Area Median Income (AMI) affects your down payment assistance eligibility, including qualifying vs household income, counted income sources, deductions, and targeted areas.
| Program | AMI Limit Range | Income Source Counted | Borrower-Only vs All Adults 18+ | Gross vs Net | Bonus Income Treatment | Spouse Not on Loan Impact |
|---|---|---|---|---|---|---|
| FHA Down Payment Assistance | 80%-115% of AMI | All | Borrower-only | Gross | Included | Decreases eligibility |
| USDA Rural Development | Up to 115% of AMI | Household | All Adults 18+ | Net (after deductions) | Excluded | Does not impact eligibility |
| State Housing Financing Agencies (e.g., CalHFA, CHFA) | 80%-120% of AMI | Borrower-only | Borrower-only | Gross | Included | Decreases eligibility |
| Local First-Time Homebuyer Programs | 80%-140% of AMI, varies by locality | All | All Adults 18+ | Gross (may vary) | Varies by program | Decreases eligibility |
3 Real-Life Scenarios
Explore how down payment assistance programs affect different situations, such as when a spouse isn't on the loan, bonus income is involved, or adult children live in the home.
- Buyer with a working spouse (spouse not on the loan): Buyer earns $65,000; spouse earns $48,000. Combined household income is $113,000. In an area with a $100,000 AMI cap for an all-adults-counted program, they exceed the limit -- but the buyer may still qualify under a borrower-only program using only their own $65,000 income.
- Buyer with an employed adult child in the home: Buyer earns $60,000; an adult child (18+) living at home earns $15,000 from part-time work. Combined household income is $75,000, under a $90,000 AMI cap for an all-adults-counted program -- the buyer qualifies.
- Self-employed borrower: Borrower reports $80,000 in gross self-employment income. A borrower-only program counts gross, not net, income even though business expense deductions lower the borrower's actual take-home pay. Close to the AMI cap, the borrower should confirm with the program whether gross or net income applies before assuming eligibility.
3-Step AMI Explainer
Learn about the three essential steps to understanding AMI limits: find your area's limit, apply the program percentage, and total your household income before considering assistance eligibility.
- Step 1: Find your area's AMI limit, published annually by HUD and adjusted for household size and county.
- Step 2: Apply the specific program's percentage of AMI (commonly 80% to 140% depending on the program) to get your income cap.
- Step 3: Total your household's counted income per that program's own rules (borrower-only vs. all adults 18+, gross vs. net) and compare it to the cap.
Check your likely DPA fit
Take our quick assessment to determine if you might qualify for down payment assistance based on current income limits, targeted areas, and specific program requirements.
This information is reviewed by a legal expert. Down payment assistance limits vary by program, county, household size, and annual HUD updates.
Questions buyers ask most: Does my spouse's income count if they're not on the loan? Does bonus income count toward the cap? Does an adult child living at home count as a household member? See the FAQ below for real answers to all three.
Disclaimer
Limits vary by program, county, household size, and annual HUD updates.
FAQ
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