Has anyonne's application ever been rejected because of your income?

Nobody expects foster parents to have a lot of money. Where I live, the only criteria is that you are able to support yourself without the foster subsidy. That is to ensure that the subsidy funds are available to meet the additional costs of having a child in your home. You say that you're able to meet your obligations with your income, so you're probably ok. I'd inquire with your county or agency to be sure of their specific guidelines though.