Affordability Criteria

An Overburdened community is a municipality in which all of the following conditions are met:

1. Users within the area served by a proposed drinking water project, sewage treatment works project, or storm water treatment project are directly assessed for the costs of construction.
2. The median household income of the area served by a proposed drinking water, sewage treatment works project or storm water treatment project does not exceed 100% of the statewide median annual household income for this state.
3. The municipality demonstrates at least one of the following:

• The taxable value per capita of the area served by a project falls into the communities representing the lowest 20% of Michigan’s population within that category. For FY26, the value is $25,269.
• The annual user costs for the corresponding portion of the water system (sewage and storm water treatment or drinking water) exceed 1% of the median annual household income of the area served by the proposed project. 

A community which qualifies as a significantly overburdened community would also be considered an overburdened community. However, any potential benefits may only be applied under one designation or the other. 

A Significantly overburdened community is a municipality in which all of the following conditions are met:

1. Users within the area served by a proposed drinking water project, sewage treatment works project, or storm water treatment project are directly assessed for the costs of construction.
2. The municipality demonstrates at least one of the following:

• The median annual household income of the area served by a proposed project is less than 125% of the federal poverty guidelines for a family of four in the 48 contiguous United States. In determining the median annual household income of the area served by the proposed sewage treatment works project or storm water treatment project under this sub-paragraph, the municipality shall utilize the most recently published statistics from the United States Census Bureau, updated to reflect current dollars, for the community that most closely approximates the area being served by the project. As used in this sub-paragraph, “federal poverty guidelines” means the poverty guidelines published annually in the Federal Register by the United States Department of Health and Human Services under its authority to revise the poverty line under 42 U.S.C. 9902. For FY26, the 125% level would be an annual household income of less than $40,188.
• The taxable value per capita of the area served by a project falls into the communities representing the lowest 10% of Michigan’s population within that category. For FY26, that value is $17,806.