Enter the Area Median Income (AMI) percentage, your household income, and the percentage of income you can allocate for rent to calculate the maximum allowable rent for income-restricted housing.
Income-Restricted Rent Formula
The following formula is used to calculate the maximum allowable rent for income-restricted housing:
Max Rent = (Household Income * (AMI / 100)) * (Rent Percentage / 100)
Variables:
- Max Rent is the maximum allowable rent based on income restrictions ($).
- Household Income is the total income of the household ($).
- AMI is the Area Median Income percentage (%) relative to the region.
- Rent Percentage is the percentage of household income that can be allocated for rent (%).
To calculate the maximum allowable rent, multiply the household income by the AMI percentage, then multiply the result by the percentage of income that can be allocated for rent.
What is Income-Restricted Rent?
Income-restricted rent refers to the maximum rent that can be charged for housing based on the income of the household and the Area Median Income (AMI) for the region. This type of rent is often used in affordable housing programs to ensure that housing remains affordable for low- to moderate-income families.
How to Calculate Income-Restricted Rent?
The following steps outline how to calculate the Income-Restricted Rent.
- First, determine the household income ($).
- Next, determine the Area Median Income (AMI) percentage (%) for your region.
- Next, determine the percentage of your income that can be allocated for rent (%).
- Use the formula to calculate the maximum allowable rent: Max Rent = (Household Income * (AMI / 100)) * (Rent Percentage / 100).
- Finally, calculate the Income-Restricted Rent ($).
- After inserting the variables and calculating the result, check your answer with the calculator above.
Example Problem :
Use the following variables as an example problem to test your knowledge.
Household Income = $50,000
Area Median Income (AMI) = 60%
Percentage of Income for Rent = 30%