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2017 AFFORDABILITY LIMITS FOR <br />OWNERSHIP AND RENTAL HOUSING <br />Livable Communities Act Grants <br />What is affordable housing? <br />The Metropolitan Council's 2040 Housing Policy Plan defines affordable housing as housing that is affordable to low- and <br />moderate-income families. <br />  <br />Who qualifies for affordable housing? <br />For 2017, the affordability limit is 80% of the area median income for both rental and ownership housing. In 2017, the area <br />median income (AMI) for a household of four is $90,400. Under these limits, a family of four can earn up to $68,000 to <br />qualify for affordable housing. For details on how this is calculated, see the History of Median Income, below.  <br />  <br />To implement the Livable Communities Act in 2017, the Council will use the following amounts as the upper limits for <br />affordable rental and ownership housing. <br />  <br />Rental housing <br />Rents include tenant-paid utilities.  <br />  <br />2017 Rental Housing <br /># Bedrooms 30% AMI 50% AMI 60% AMI 80% AMI <br />Efficiency $474 $791 $949 $1,265 <br />1 Bedroom $508 $848 $1,017 $1,356 <br />2 Bedrooms $610 $1,017 $1,220 $1,627 <br />3 Bedrooms $705 $1,175 $1,410 $1,880 <br />4 Bedroom $786 $1,311 $1,573 $2,097 <br />  <br />  <br />Ownership housing <br />For owner-occupied housing, the income limit includes principal, interest, property taxes and home insurance. <br />Assumptions include: <br />Fixed-interest, 30-year home loan <br />Interest rate of 4.375% <br />A 29% housing debt-to-household income ratio <br />A 3.5% down payment <br />A property tax rate of 1.25% of the property sales price <br />Mortgage insurance at 0.85% of unpaid principal <br />$100/month for hazard insurance <br />2017 Home Ownership <br />Household Income Level Affordable Home Price <br />80% AMI ($68,000)$236,000 <br />60% AMI ($54,240)$185,000 <br />50% AMI ($45,200)$151,500 <br />30% AMI ($27,100)$85,000 <br />In 2017, applying an interest rate of 4.375% on a 30-year fixed-rate home loan and the standard mortgage assumptions <br />listed above to the 80% AMI amount for a family of four ($68,100) yields an affordable purchase price of $236,000. This <br />compares to a 2015 limit of $240,500 and a 2016 limit of $235,000.  The purchase prices affordable at these income limits <br />have increased for 2017 compared with 2016 because of increasing interest rates and an increase in the region's Area <br />Median Income. <br />  <br />History of area median income <br />Through 2010, the Council identified a purchase price ceiling for owner-occupied homes based on what a family of four <br />with an income at or below 80% AMI could afford at prevailing interest rates. For affordable rental units, the limit was <br /> Metropolitan Council - metrocouncil.org