FREE HCCP Regulatory Compliance Questions and Answers
How long is the compliance period during which a project must adhere to LIHTC requirements?
The LIHTC program requires that projects remain in compliance with affordability and tenant income requirements for 30 years. This long-term commitment ensures that affordable housing remains available to low-income tenants over an extended period.
What is the primary purpose of the Low-Income Housing Tax Credit (LIHTC) program?
The LIHTC program is designed to encourage the development of affordable rental housing for low-income households by providing tax credits to investors. This helps lower the financing costs for developers, making it economically feasible to build and maintain affordable housing.
Which federal agency is primarily responsible for overseeing the LIHTC program?
The IRS oversees the LIHTC program, ensuring that the credits are distributed and used in accordance with federal regulations. While HUD provides guidance and support, the IRS is responsible for the compliance and administration of the tax credits.
What is a Qualified Allocation Plan (QAP)?
The QAP is developed by each state’s housing finance agency and specifies the criteria for how tax credits will be awarded to projects. It includes priorities, scoring criteria, and application procedures for allocating LIHTCs.
What is a "low-income unit" according to LIHTC regulations?
Under LIHTC regulations, a low-income unit is one that is designated for tenants whose incomes are below a certain percentage of the area median income, typically 50% or 60%, to ensure that the housing remains affordable for low-income households.