(a) Determination of income for admission and continued occupancy is governed by this Subpart, except that federally assisted projects shall conform to HUD's requirements governing income determination for the admission and continued occupancy of below market rent tenants.

(b) Section 85-a of the Private Housing Finance Law concerns rentals and selection of tenants for limited dividend housing companies. Under its provisions, admission to a project is limited to those households whose probable aggregate annual income does not exceed seven times the annual rent including the value or cost of heat, light, water, and cooking fuel, except that in the case of households with three or more dependents, such ratio shall not exceed eight times the annual rent.

(c) Section 31 of the Private Housing Finance Law applies to limited profit housing companies. Under its provisions, admission to a project is limited to those households whose probable aggregate annual income does not exceed seven times the annual rent including the value or cost of heat, light, water, and cooking fuel, except that in the case of households with three or more dependents, such ratio shall not exceed eight times the annual rent.

(d) Households with two or more dependents whose probable aggregate annual income does not exceed 125 percent of the relevant income limit in subdivision (a), (b) or (c) of this section shall also be eligible for admission to a project. Households eligible for admission under the provisions of this subdivision shall pay a rental surcharge according to the housing company's rental surcharge schedule.

(e) Applications shall be accepted where the probable aggregate income at the time of application and admission does not exceed the greater of the limits set forth in subdivision (a), (b) or (c) of this section or the median income as adjusted for household size for such households for the metropolitan statistical area in which the project is located or, if a project is located outside a metropolitan statistical area, the median income as adjusted for household size for such households for the county in which the project is located as most recently determined by the United States Department of Housing and Urban Development. Any household becoming eligible for admission under the alternative computation set forth in this subdivision (e) of this section shall pay, from the time of admission, a rental surcharge, as provided for in this Subpart, computed on the basis of the income limitations applicable to such households in the absence of this subdivision.

(f) Tenants whose incomes increase over the admission limits may continue in occupancy. Their rent, however, shall be increased in accordance with the rent schedule prepared by the housing company and approved by the division. The division may direct a particular rent increase schedule to be prepared and implemented.

(g) Where family income has been increased by the addition of a new household member, the housing company shall recompute the family income and, if warranted, assess the appropriate surcharge.