On April 1, the U.S. Department of Housing and Urban Development (HUD) released its FY 2025 income limits, which determine eligibility for a range of affordable housing programs including Section 8, public housing, and the Low-Income Housing Tax Credit (LIHTC). This year’s release comes with a major change: HUD has implemented a 9.2% national cap on income limit increases, a move that has significant implications for Texas and beyond.
Income limits affect eligibility for a wide range of programs: public housing, Section 8, Section 202, Section 811, Section 221(d)(3), Section 236, and Multifamily Tax Subsidy Projects (MTSPs) financed with LIHTCs or private activity bonds. HUD’s FY 2025 income limits are effective immediately, and must be implemented by May 16 in areas where income limits decreased.
National Trends and the New 9.2% Cap
Nationwide, HUD’s 2025 income limits increased by an average of 6.2%, but a new 9.2% cap on annual increases significantly shaped the outcome. The cap, which is the greater of 5% or twice the national median income growth (4.6%), with a maximum ceiling of 10%, limited increases in 27% of HUD-defined areas. Without the cap, those areas would have seen average increases closer to 14%. Meanwhile, 41% of areas still experienced increases above 8%, 71% had increases over 5%, and just 5% of areas saw income limits decrease. The cap played an especially important role in fast-growing regions where incomes would have otherwise risen sharply.
Texas: Key Figures for 2025
Texas is seeing the cap’s effects in both urban and rural areas, with important implications for eligibility, rent-setting, and LIHTC project financing.
FY 2025 Texas Median Family Incomes
- Statewide: $98,800
- Metro areas: $101,200
- Nonmetro areas: $79,400
FY 2025 Texas Income Limits
| Household Size | 30% of Median | Very Low Income (50%) | Low Income (80%) |
| 1 Person | $20,800 | $34,600 | $55,350 |
| 2 People | $23,750 | $39,550 | $63,250 |
| 3 People | $26,700 | $44,500 | $71,150 |
| 4 People | $29,650 | $49,400 | $79,050 |
| 5 People | $32,050 | $53,400 | $85,400 |
| 6 People | $34,400 | $57,350 | $91,700 |
| 7 People | $36,800 | $61,300 | $98,050 |
| 8 People | $39,150 | $65,250 | $104,350 |
FY 2025 Texas MTSP Income Limits
Effective April 1, 2025. Click here to view.
FY 2025 Texas Section 8 Income Limits
Effective April 1, 2025. Click here to view.
FY 2025 Texas Section 221(d)(3) BMIR, Section 235, and Section 236 Income Limits
Effective April 1, 2025. Click here to view.
FY 2025 Texas List of Counties Identified by Metro Area
Click here to view.
Rural Texas Counties Hit Hard by the Cap
While much of the media attention has focused on large metro areas, several rural counties in Texas are among the hardest hit by the new 9.2% cap. Two counties—Glasscock and Winkler—ranked among the top 10 U.S. areas most impacted by capped income limits.
- Glasscock County:
- 2025 VLI = $55,300
- Uncapped VLI = $66,500
- Difference = $11,200
- Winkler County:
- 2025 VLI = $44,500
- Uncapped VLI = $55,600
- Difference = $11,100
Without the new cap, income and rent limits in these counties would have risen significantly—potentially improving feasibility for new construction or rehab deals. Instead, these areas will now see constrained limits, potentially making projects harder to finance.