HCCP HCCP Site and Unit Standards 2 — Questions and Answers
Question 1: What is the purpose of the 'vacant unit rule' in LIHTC compliance?
- A vacated low-income unit retains its qualified status if the owner rents the next available unit of comparable size to an income-qualified tenant (Correct answer)
- Vacant units automatically lose their tax credit status after 30 days
- Owners must immediately replace vacating tenants to avoid penalties
- Vacant units must be inspected monthly by the state agency
Correct answer: A vacated low-income unit retains its qualified status if the owner rents the next available unit of comparable size to an income-qualified tenant
The vacant unit rule allows a unit to remain in the low-income set-aside if the next available comparable unit is rented to an income-qualified household.
Question 2: Which of the following best describes the 'next available unit' rule when an over-income tenant is discovered in a LIHTC property?
- The next unit of equal or smaller size that becomes available must be rented to an income-qualified household (Correct answer)
- The over-income tenant must be evicted immediately
- The owner must reduce rent for the over-income unit
- No action is required until the tenant voluntarily vacates
Correct answer: The next unit of equal or smaller size that becomes available must be rented to an income-qualified household
When a tenant's income rises above the qualifying limit, the next available unit of equal or smaller size must be rented to an income-qualified household to maintain set-aside percentages.
Question 3: Under the LIHTC program, what standard governs minimum unit square footage and habitability?
- State and local building codes, since federal LIHTC law does not specify minimum square footage (Correct answer)
- HUD's minimum property standards of 500 sq ft per unit
- IRS regulations requiring at least 400 sq ft per bedroom
- Section 8 HQS standards apply universally
Correct answer: State and local building codes, since federal LIHTC law does not specify minimum square footage
Federal LIHTC rules do not specify minimum square footage; local and state building codes govern habitability and minimum size requirements.
Question 4: A LIHTC property owner discovers that a unit has significant mold growth. Under compliance standards, what is the most appropriate immediate action?
- Address the health hazard promptly and document all remediation steps (Correct answer)
- File Form 8823 before beginning any remediation
- Transfer the tenant to a market-rate unit
- Deduct the unit from the set-aside count permanently
Correct answer: Address the health hazard promptly and document all remediation steps
Owners must prioritize tenant health and safety by promptly remediating the mold and documenting all corrective actions taken.
Question 5: When a LIHTC unit is designated as a manager's unit, how does this affect the project's applicable fraction?
- Manager's units occupied by on-site staff do not count toward the residential rental units in the applicable fraction calculation (Correct answer)
- Manager's units count as low-income units automatically
- Manager's units reduce the qualified basis by 50%
- Manager's units must be included as market-rate units
Correct answer: Manager's units occupied by on-site staff do not count toward the residential rental units in the applicable fraction calculation
On-site manager units occupied by employees are excluded from the residential rental unit count when calculating the applicable fraction.
Question 6: Which of the following changes to a LIHTC unit would most likely require state agency notification and could affect the project's qualified basis?
- Converting a residential unit to a community room or office (Correct answer)
- Painting the unit interior a different color
- Replacing aging appliances with new ones of the same type
- Installing new carpeting in a unit
Correct answer: Converting a residential unit to a community room or office
Converting a residential unit to a non-residential use removes it from the qualified basis and requires state agency notification.
HCCP HCCP Site and Unit Standards 2
What is the purpose of the 'vacant unit rule' in LIHTC compliance?