Very Low Income (VLI)

What Is Very Low Income?

Very low income (VLI) describes a household whose income is no more than 50% of area median income (AMI), adjusted for household size. It sits between extremely low income (30% of AMI) and low income (80% of AMI) in HUD’s standard tiers.

The definition comes from Section 3 of the U.S. Housing Act of 1937, as amended. The law lets HUD set the ceiling higher or lower than 50% where area incomes are unusually high or low.

How It Works

The very low-income limit is the anchor of HUD’s whole system of income limits. HUD calculates it first for a four-person household:

1. Start at 50% of the area’s median family income.
2. Raise it where rents are unusually high relative to incomes, measured against the area’s Fair Market Rent.
3. Lower it in areas with unusually high incomes.
4. Raise it if it falls below 50% of the state’s non-metro median income.
5. Hold year-to-year changes within HUD’s caps and floors.

HUD then derives most other limits from this figure. The extremely low-income limit starts at 30/50ths of it, and the low-income limit is generally 1.6 times it. Deriving them this way keeps the tiers in order even where the very low-income limit has been adjusted.

Where the 50% Line Is Used

• Housing Choice Vouchers. Federal law makes very low-income families the main group eligible for tenant-based rental assistance. Low-income families above that line qualify only in limited cases, such as when a housing agency adopts its own criteria for them.
• Low-Income Housing Tax Credit. Under the “20-50” test, one of three minimum set-aside options an owner can choose, at least 20% of a property’s units must be rent-restricted and occupied by households at or below 50% of AMI.
• Measuring need. HUD’s “worst case needs” count covers very low-income renters who receive no housing assistance and pay more than half their income for rent, live in severely inadequate housing, or both.

Why It Matters

HUD’s 2025 report to Congress counted 8.46 million renter households with worst case needs in 2023. It found only 59 affordable units available for every 100 very low-income renter households.

Very low-income renters are the core group that federal rental assistance is designed to serve. Because the worst case needs count includes only households that receive no assistance, it is one gauge of how far that assistance falls short of the need.

For your area’s limits, use HUD’s income limits lookup on the HUD User website.