What is considered a low-income borrower according to federal guidelines?

A low-income borrower, according to federal guidelines, is defined as someone whose income is less than 80% of the median income for their area. This threshold is significant in various programs designed to assist those who may struggle to access affordable housing or financial services. Defining low-income at this level helps identify those who may benefit from specific federal housing programs and initiatives aimed at promoting homeownership and increasing access to housing for economically disadvantaged individuals.

In contrast, other income brackets, such as those below 60% or at 100% of the median income, are considered in different categories for purposes like very low-income and moderate-income classifications, which serve distinct purposes in federal housing assessments and assistance programs. Therefore, understanding that the designation of low-income is specifically set at less than 80% of the median is crucial for identifying eligibility for various forms of financial assistance and support in housing.