A household of 4 earning $118,000 applies for a USDA guaranteed loan where the area median income is $96,000.
Correct Answer
D) Over the limit: adjusted income may not exceed 115% of area median
The guaranteed program serves moderate-income households, defined as adjusted household income at or below 115% of area median; 115% of $96,000 is $110,400, so $118,000 is over before any adjustments are applied. Other choices: 150% is not a USDA threshold; income is counted for the whole household rather than for the applicant alone, which is what catches a working second adult; and 80% of median is the low-income line used in other housing programs, not the guaranteed ceiling. Source: 7 CFR 3555.152, income eligibility
Why This Is the Correct Answer
The guaranteed program serves moderate-income households, defined as adjusted household income at or below 115% of area median; 115% of $96,000 is $110,400, so $118,000 is over before any adjustments are applied. Other choices: 150% is not a USDA threshold; income is counted for the whole household rather than for the applicant alone, which is what catches a working second adult; and 80% of median is the low-income line used in other housing programs, not the guaranteed ceiling. Source: 7 CFR 3555.152, income eligibility
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