HCCP Financial Analysis 2

Question 1

In an LIHTC pro forma, which line item represents the gap between gross potential rent and effective gross income?

Accepted Answer

Vacancy and collection loss allowance

Answer

Operating expense ratio

Answer

Debt service coverage ratio

Answer

Replacement reserve deposit

Question 2

A tax credit property has an annual debt service of $180,000 and a net operating income of $216,000. What is the DSCR?

Accepted Answer

1.20

Answer

0.83

Answer

1.15

Answer

1.35

Question 3

Which measure expresses total development costs relative to the number of affordable units being created?

Accepted Answer

Cost per unit

Answer

Gross rent multiplier

Answer

Net present value

Answer

Break-even occupancy rate

Question 4

For LIHTC purposes, what does a 'basis boost' of up to 30% allow in Qualified Census Tracts?

Accepted Answer

Increases eligible basis to generate more credits

Answer

Increases the applicable percentage

Answer

Reduces required investor equity

Answer

Extends the compliance period

Question 5

Which ratio do lenders and allocating agencies use most frequently to assess a project's ability to service debt from operations alone?

Accepted Answer

Debt service coverage ratio

Answer

Loan-to-value ratio

Answer

Operating expense ratio

Answer

Break-even occupancy ratio

Question 6

If a tax credit project's annual operating expenses total $320,000 and effective gross income is $500,000, what is the operating expense ratio?

Accepted Answer

64%

Answer

56%

Answer

60%

Answer

68%

Question 7

In a Housing Credit deal, the term 'hard costs' most specifically refers to which category of development expenses?

Accepted Answer

Construction labor and materials

Answer

Architectural and engineering fees

Answer

Loan origination and financing costs

Answer

Land acquisition and brokerage fees