Which Is One Of The Project’S Minimum Set Aside Elections At A Tax Credit Property?

What is eligible basis?

“Eligible basis” is the total amount of development cost that would be eligible for generating Section 42 tax credits if all of the housing units are used for low-income housing.

Costs that may be included in the LIHTC eligible basis must be depreciable..

What is a certified professional of occupancy?

Certified Professional of Occupancy (CPO) The Certified Professional of Occupancy (CPO) course is a comprehensive program for affordable housing property management staff. Created by the National Affordable Housing Management Association (NAHMA), on the HUD Handbook 4350.3.

Is Lihtc the same as Section 8?

LIHTC is a newer form of providing affordable housing and it is ultimately overseen by the IRS. … Section 8 and Section 42 have the same goal: to create and to preserve affordable housing for eligible Americans.

What is the applicable fraction?

Applicable fraction is the percentage of a building that is treated as low-income use and generally eligible for the LIHC. The applicable fraction is the lesser of the unit fraction or the floor space fraction.

What is Section 42 of the IRS code?

The Section 42 housing program refers to that section of the Internal Revenue Tax Code which provides tax credits to investors who build affordable housing. Investors receive a reduction in their tax liability in return for providing affordable housing to people with fixed or lower income.

What is an 8609 form?

Form 8609 can be used to obtain a housing credit allocation from the housing credit agency. A separate Form 8609 must be issued for each building in a multiple building project. Form 8609 is also used to certify certain information. Housing credit agency.

What is included in eligible basis?

Eligible Basis may include the cost of facilities for use by tenants to the extent there is no separate fee for using the facilities and the facilities are available on a comparative basis to all tenants. It may also include the cost of amenities if the amenities are comparable to the cost of amenities in other units.

What credit score is needed for affordable housing?

580Federal Housing Administration loans are available only if your FICO score is above 580, making them much more accessible than loans from nongovernment sources.

How long does Lihtc last?

Investors claim tax credits for the first 10 years, compliance lasts 15 years, and the federal affordability period lasts 30 years. During the 15-year compliance period, the IRS can reclaim tax credits for properties that no longer serve required households.

Is Lihtc a HUD program?

The Low-Income Housing Tax Credit (LIHTC) is the most important resource for creating affordable housing in the United States today. The LIHTC database, created by HUD and available to the public since 1997, contains information on 48,672 projects and 3.23 million housing units placed in service between 1987 and 2018.

What is a tax credit certification?

The Housing Credit Certified Professional (HCCP) is a specialized designation for developers, property managers, asset managers and others working in the affordable housing industry through the Low-Income Housing Tax Credit (LIHTC) program.

What is the 50 test Lihtc?

The 20-50 test means that 20% or more of the units in the project are occupied by tenants whose income is 50% or less of the area median gross income. The test is met on a project-wide basis rather than on each building as is the basic requirement of IRC Sec. 42.

Do I qualify for Lihtc?

To qualify for admission, applicants must fall within the unit’s income limits. This is usually 50% or 60% of the AMI (Area Median Income). In addition, LIHTC owners cannot discriminate against voucher families and must accept Section 8 voucher tenants. … LIHTC rents are not based on a tenant’s income.

What is tax credit property management?

Definition: A tax credit property is an apartment complex owned by a landlord who participates in the federal low-income housing tax credit program. These landlords get to claim tax credits for eligible buildings in return for renting some or all of the apartments to low-income tenants at a restricted rent.

What annual salary is considered low income?

Those making less than $39,500 make up the lower-income bracket, while those making more than $118,000 make up the upper-income bracket.

How are affordable rents calculated?

Generally there is a maximum income cutoff expressed as a share of the area median income (AMI). … In general, rents are set so that a family earning 60 percent of AMI would pay no more than 30 percent of their income. Some programs will use 33 percent or 35 percent for this calculation.

What is income qualified property?

Income Eligibility: To purchase the Property, Buyer must qualify as an “Qualified Household,” which is defined as a household whose annual income does not exceed the qualifying limits under California law for “persons or families of moderate income,” as further defined in the Affordable Housing Agreement.

How does the Lihtc program work?

The Low-Income Housing Tax Credit (LIHTC) subsidizes the acquisition, construction, and rehabilitation of affordable rental housing for low- and moderate-income tenants. … Once the housing project is placed in service (essentially, made available to tenants), investors can claim the LIHTC over a 10-year period.

What is a c3p?

A two-day seminar to become a Certified Credit Compliance Professional (C3P) for Low Income Housing Tax Credit. A two-day certification course focusing on all aspects of marketing and management of projects involved with the Low Income Housing Tax Credit.

What is tax exempt bond financing for affordable housing?

The IRS Code (Section 103) allows the purchasers of the bonds to deduct the interest income from the bonds from their federal gross income taxes. Thus the interest rate on tax- exempt bonds is lower than conventional bank financing (typically by about 2%), and these savings can promote housing affordability.