You're applying for a mortgage, and somewhere in the paperwork your lender mentions "AMI." Maybe they say you're "at 80% AMI" or "under 100% AMI." It sounds like jargon — and it is — but it's jargon that can save you thousands of dollars.
AMI stands for Area Median Income. It's the midpoint household income for a specific geographic area, calculated annually by the U.S. Department of Housing and Urban Development (HUD). Half the households in your area earn more, half earn less. Your income relative to your area's AMI determines whether you qualify for down payment grants, reduced mortgage insurance, special loan programs, and affordable housing initiatives that can dramatically lower the cost of buying a home.
Use our calculator to find your AMI bracket and see which programs you may qualify for — then read on to understand why this number matters more than most buyers realize.
How AMI Is Calculated
HUD calculates AMI for every metropolitan statistical area (MSA) and county in the United States. The number is based on a 4-person household as the baseline, then adjusted up or down for household size. A single person's income limit is approximately 70% of the 4-person AMI, while a family of six is approximately 116%.
The AMI figures are updated annually, usually released in the spring. Here are the 2025 AMI levels for Altgage's primary markets:
Texas:
- Austin-Round Rock: $110,200
- Dallas-Fort Worth: $97,200
- Houston-The Woodlands: $96,600
- San Antonio-New Braunfels: $82,100
Florida:
- Jacksonville: $82,900
- Tampa-St. Petersburg: $76,600
- Orlando-Kissimmee: $74,500
- Miami-Fort Lauderdale: $74,200
Colorado:
- Denver-Aurora: $113,200
- Colorado Springs: $93,400
Massachusetts:
- Boston-Cambridge: $140,200
- Worcester: $107,100
California:
- San Francisco-Oakland: $152,400
- San Diego: $106,900
- Sacramento: $100,900
- Los Angeles-Long Beach: $96,000
Notice the range. A household earning $95,000 is at 98% AMI in Houston but only 68% AMI in Boston. The same income qualifies for completely different programs depending on where you buy. This is why AMI matters — it's relative to your local market, not a national standard.
The AMI Brackets That Matter for Mortgages
Lenders, government agencies, and DPA programs use specific AMI thresholds as eligibility cutoffs. Here are the brackets and what they unlock:
≤50% AMI — Very Low Income
At or below 50% of AMI, you may qualify for Section 8 Housing Choice Vouchers, public housing programs, and the deepest subsidies available through HOME Investment Partnerships. These are the most generous assistance programs but come with waitlists and limited availability.
≤80% AMI — The Sweet Spot for Most Programs
This is the threshold that unlocks the most mortgage-specific benefits. At or below 80% AMI, you may qualify for:
- Fannie Mae HomeReady: 3% down payment with reduced PMI rates. PMI cancels at 80% LTV.
- Freddie Mac Home Possible: 3% down with income-based pricing advantages and reduced PMI.
- Most down payment assistance (DPA) grants: Programs like the FHA Zero Down and state-level programs in Texas, Florida, and Colorado typically cap eligibility at 80% AMI.
- USDA loans: Available in rural and some suburban areas with zero down payment.
- Community Reinvestment Act (CRA) products: Banks offer special lending programs for low-to-moderate income borrowers in their service areas.
If your income is even slightly below this threshold, the savings can be substantial. A HomeReady loan at 3% down with reduced PMI can save you $200–$400/month compared to a standard conventional loan at the same rate.
≤100% AMI — Moderate Income
Several programs extend to borrowers at or below 100% AMI, including Freddie Mac HomeOne (3% down, no geographic restriction), some state bond programs, and employer-assisted housing programs. The selection is narrower than at 80%, but still meaningful.
≤140% AMI — Workforce Housing
Some newer programs target the "missing middle" — households earning too much for traditional affordable housing programs but still struggling to buy in high-cost markets. Certain state bond programs and Fannie Mae's 97% LTV standard product are available up to 140% AMI. In high-cost areas like Boston ($140,200 AMI), this means a household earning up to $196,000 could qualify.
Why Most Buyers Don't Know About AMI-Based Programs
Here's the uncomfortable truth: most loan officers don't mention AMI-based programs unless you ask. There are a few reasons for this:
Many retail lenders only offer their own products and may not have HomeReady, Home Possible, or DPA programs in their portfolio. They can't sell what they don't carry.
AMI calculations require extra work. The loan officer needs to look up the correct MSA, verify household size, and confirm the borrower falls under the threshold. It's easier to put everyone into a standard conventional or FHA loan.
Some programs have slightly lower commission structures for the originator, creating a subtle disincentive to recommend them.
This is where working with a mortgage broker makes a real difference. At Altgage, we check your AMI eligibility as a standard part of every prequalification. If you qualify for HomeReady, Home Possible, or a DPA grant, we'll tell you — because those programs often provide better terms than the alternatives, and our job is to find you the best option, not the easiest one to process.
How to Look Up Your AMI
You can look up the official AMI for your area in three ways:
Use the calculator above. Select your metro area and household size to see your adjusted AMI and program eligibility instantly.
HUD's Income Limits page: Go to huduser.gov/portal/datasets/il.html, select your state and county, and download the full income limit table.
Ask your lender. Any qualified loan officer should be able to look up your AMI bracket during the prequalification process. If they can't, that's a red flag.
AMI Changes Every Year — Check Before You Apply
HUD updates AMI figures annually, usually in the spring. If you're close to an AMI threshold (say you're at 82% AMI and the program caps at 80%), it's worth checking whether updated figures might change your eligibility. AMI generally increases year-over-year as wages rise, which means the income threshold for programs goes up too. A household that didn't qualify last year may qualify this year without any change in their own income.
Frequently Asked Questions
What does AMI stand for in real estate?
AMI stands for Area Median Income. It's the midpoint household income for a geographic area, calculated annually by HUD. It's used by lenders and government programs to determine eligibility for affordable housing programs, down payment assistance, and special loan products.
How does AMI affect mortgage eligibility?
Many mortgage programs use AMI thresholds as eligibility cutoffs. Borrowers at or below 80% AMI may qualify for programs like HomeReady (3% down, reduced PMI), Home Possible, down payment grants, and USDA loans. Higher AMI brackets (100%, 140%) unlock additional workforce housing programs.
How do I find the AMI for my area?
Use the AMI calculator on this page, visit HUD's Income Limits website at huduser.gov, or ask your lender during prequalification. AMI varies by metro area and household size, so make sure you're looking at the right geography and adjusting for your household.
Does AMI include all household income?
It depends on the program. Most AMI-based programs count total gross household income from all adult members — wages, self-employment income, Social Security, investment income, and other regular sources. The specific definition varies by program, so confirm with your lender.
Can I qualify for HomeReady if I'm slightly above 80% AMI?
No — HomeReady has a hard income cap at 80% AMI for the census tract where the property is located. However, AMI figures are updated annually, and in some census tracts there are no income limits if the tract is in a low-income area. Check with your lender for tract-level eligibility.
Is AMI the same everywhere in a state?
No. AMI is calculated at the metro area or county level, not the state level. Within Texas alone, AMI ranges from $82,100 in San Antonio to $110,200 in Austin. This means your program eligibility depends on exactly where you're buying.
The Bottom Line
AMI is the number that determines whether you're "low income" or "moderate income" in the eyes of mortgage lenders and government programs — and the label matters, because it unlocks real money. Down payment grants, reduced PMI, 3% down programs, and special loan products all have AMI-based eligibility thresholds.
The borrowers who benefit are the ones who know to ask. If your lender hasn't checked your AMI bracket, ask them to. If they don't know how, find a lender who does.
At Altgage, AMI eligibility is part of every prequalification. We check whether you qualify for HomeReady, Home Possible, DPA grants, and every other AMI-based program available for your area. Start here to see where you stand, or get pre-approved to see your full options.
Related Reading on Altgage
- Down Payment Assistance Programs in Texas — Free grants you may qualify for
- FHA Zero Down / Empower DPA — 100% financing with grant assistance
- How to Avoid PMI on Your Mortgage — 5 strategies including reduced-PMI programs
- Can I Get a Mortgage with a 600 Credit Score? — Options by loan type
- Can You Roll Closing Costs Into Your Mortgage? — More ways to reduce cash to close
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