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

Vacancy and collection loss allowance accounts for the expected shortfall between 100% occupancy gross rents and the income actually collected.

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

DSCR = NOI ÷ Annual Debt Service = $216,000 ÷ $180,000 = 1.20.

Question 3

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

Accepted Answer

Cost per unit

Answer

Cost per unit is calculated by dividing total development costs by the number of affordable units and is a key underwriting benchmark.

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

The 30% basis boost in a QCT or Difficult Development Area increases eligible basis, thereby generating a larger credit amount without changing the applicable percentage.

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

The debt service coverage ratio measures how many times NOI covers annual debt service, directly reflecting debt repayment capacity.

(HCCP) Housing Credit Certified Professional Practice Test

(HCCP) Housing Credit Certified Professional Practice Test

HCCP Financial Analysis 2