Low- or moderate-income geographic areas or individuals are a primary focus of CRA. The collective income group is often abbreviated “LMI” when describing both the individuals and areas together.
An individual is considered to be LMI based on their annualized family income. Overall, to be classified as LMI, an individual or family’s household income must be 80% of the median income for the county or area where they reside.
These income levels can be further separated by low- or moderate-income. Moderate-income individuals have an annualized family income between 50% and 80% of the HUD area median income. Low-income individuals have an annualized family income of less than 50% of the HUD area median income. Median incomes for every county in the United States can be found on HUD’s website.
The U.S. Census Bureau divides all United States geographies into census tracts and collects data about each individual census tract. This data is collect through the 10-year census as well as the 3-year and 5-year American Community Surveys.
The tract income level for each census tract is assigned based on the average income of the residents in that census tract. Census tracts can be considered upper, middle, moderate or low income.
A moderate-income census tract indicates that the annualized family income of the households or residents in the census tract are between 50% and 80% of the HUD area median income for the county where the census tract is located.
A low-income census tract indicates that the annualized family income of the households or resident in the census tract are below 50% of the HUD area median income for the county where the census tract is located.