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Housing TIF Districts December 6,2000 Page 3 If the City does not want the project to be both rent and income restricted, the district could become a housing district (not qualified) and would only need to meet income requirements. The income limits for these districts, however, use HUD numbers and are often lower than those for a qualified housing district. A standard housing district requires that the rental housing have a certain percentage of its units with annual incomes less than a certain percentage of the county median income. Housing districts require that the income is adjusted for family size. The income restrictions are as follows(using HUD guidelines): INCOME RESTRICTIONS ADJUSTED FOR FAMILY SIZE (HOUSING DISTRICT) -Hennepin County Area No. of Persons 50% of Median 60% of Median 80% of Median Income Income Income 1-person $23,000 $27,600 $35,150 2-person $26,300 $31,560 $40,150 3-person $29,550 $35,460 $45,200 4-person $32,850 $39,420 $50,200 Source:Department of Housing and Urban Development The three options for income limits on a standard housing district are 20% of the units at 50% of median income, 40% of the units at 60% of median income, or 50% of the units at 80% of median income. Usually, at the time we establish a district, the project needs to choose one of the options and meet those requirements for the life of the district. The income restrictions are not an assets test and most seniors do not have trouble meeting income restrictions. There are no rent restrictions for a standard housing district. SINGLE FAMILY OWNER-OCCUPIED HOUSING DISTRICT For single family developments, at least 95% of the houses assisted with tax increment must be occupied with persons at 100% of median income for a family of two or less and 115% of median income for families of three or more (rental housing would have stricter income limitations). Median income under this provision is the greater of the statewide median or the county median. For Hennepin County, the median income is $68,600 and the statewide median is $57,900. Therefore, the family of three or more could earn up to$66,585 (115% of$57,900) and still qualify to live in the homes. There is no restriction on the value of the homes built nor upon the income of the subsequent purchasers of the house. Houses not meeting the qualifications may be built,but not assisted with tax increment.