Not to throw a monkey wrench into this discussion, but there are many programs administered by HUD. If you check the "Affordable Housing" program, Title 42 - The Public Health and Welfare, Chapter 130 - National Affordable Housing Subchapter II - Investment in Affordable Housing you can find that they allow 3 different methods for calculating income under § 92.203 "Income Determinations":
1.
“Annual income’’ as defined at 24 CFR 5.609 (except when determining the income of a homeowner for an owner-occupied rehabilitation project, the value of the homeowner’s principal residence may be excluded from the calculation of Net Family Assets)[this is the reference provided by BS]; or
2.
Annual Income as reported under the Census long-form for the most recent available decennial Census. This definition includes:
i. Wages, salaries, tips, commissions, etc.;
ii. Self-employment income from owned non-farm business, including proprietorships and partnerships;
iii. Farm self-employment income;
iv. Interest, dividends, net rental income, or income from estates or trusts;
v. Social Security or railroad retirement;
vi. Supplemental Security Income, Aid to Families with Dependent Children, or other public assistance or public welfare programs;
vii. Retirement, survivor, or disability pensions; and
viii. Any other sources of income received regularly, including Veterans’ (VA) payments, unemployment compensation, and alimony; or
3.
Adjusted gross income as defined for purposes of reporting under Internal Revenue Service (IRS) Form 1040 series for individual Federal annual income tax purposes.
So HUD does allow use of AGI for income determination purposes for the affordable housing programs. See
24 CFR Part 92