HCCP Financial Analysis 4

Question 1

A tax credit project has total eligible basis of $4,000,000 and an applicable percentage of 9%. What is the annual tax credit allocation?

Accepted Answer

$360,000

Answer

$180,000

Answer

$240,000

Answer

$400,000

Question 2

Which source of funds in a LIHTC capital stack is typically repaid only from cash flow or upon sale or refinancing?

Accepted Answer

Deferred developer fee

Answer

Senior permanent loan

Answer

Construction loan

Answer

Investor equity

Question 3

Break-even occupancy is defined as the occupancy level at which a property's effective gross income exactly covers which of the following?

Accepted Answer

Operating expenses plus debt service

Answer

Replacement reserves only

Answer

Operating expenses only

Answer

Investor return requirements

Question 4

In a LIHTC analysis, 'soft debt' most commonly refers to which type of financing?

Accepted Answer

Subordinate government loans at below-market rates or deferred terms

Answer

The senior permanent mortgage

Answer

Equity from the limited partner investor

Answer

Bridge financing during construction

Question 5

When underwriting rent increases in a LIHTC pro forma, what annual growth rate do most state agencies conservatively assume?

Accepted Answer

2–3%

Answer

0%

Answer

5–6%

Answer

8–10%

Question 6

The 'applicable fraction' in LIHTC is the lesser of which two percentages?

Accepted Answer

Unit fraction and floor space fraction

Answer

Credit percentage and qualified basis percentage

Answer

Occupancy rate and income-qualified tenant rate

Answer

Eligible basis percentage and total basis percentage

Question 7

A 60-unit LIHTC project has 54 income-qualified units with 48,000 sq ft out of 55,000 total sq ft. What is the applicable fraction?

Accepted Answer

87%

Answer

88%

Answer

90%

Answer

92%