What is adjusted gross income for housing eligibility?

HUD adjusts a household's gross income by subtracting specific deductions to reach the figure used for program eligibility and rent determination. This adjusted gross income (AGI) is not the same as tax AGI. The calculation starts with all household income sources, then removes deductions for dependents under 18, elderly household members (62 and older), persons with disabilities, and unreimbursed medical and care expenses for elderly or disabled family members.

Each deduction reflects actual household structure and costs. For example, a family with three young children receives a higher dependent allowance than a household with one child. A household where the primary earner is over 62 qualifies for an elderly deduction that lowers AGI further. Unreimbursed medical expenses (copays, prescriptions, therapy) for elderly or disabled members reduce AGI directly.

Adjusted gross income matters because HUD income limits for low-income housing programs are applied to AGI, not gross income. This means a household may fall below the income limit even if gross earnings appear slightly high. The adjustment recognizes that some household resources go to caring for dependents or managing health needs and are not available for rent. Program providers use AGI to verify whether applicants qualify for assistance and to set rent based on the household's actual income available for housing costs.