HCCP Regulatory Compliance 3

Question 1

A LIHTC unit sits vacant for 6 months without being rented to a qualified tenant. Which compliance issue does this most likely trigger?

Accepted Answer

Vacancy loss of credit for that unit during the period it is not occupied by a qualified tenant

Answer

No compliance issue because vacant units are not counted in the applicable fraction

Answer

Immediate recapture of all credits claimed since the building was placed in service

Answer

The unit must be permanently removed from the low-income set-aside

Question 2

Under IRC §42, which of the following is NOT a permissible basis for excluding an applicant from a LIHTC unit?

Accepted Answer

The applicant's national origin

Answer

Prior criminal conviction for drug-related activity on a housing project

Answer

Income exceeding the applicable limit

Answer

Failure to meet the minimum age requirement for an elderly project

Question 3

An owner elects the minimum set-aside in Year 1. In Year 3, can the owner change to a more restrictive set-aside election?

Accepted Answer

No, the minimum set-aside election is irrevocable once made

Answer

Yes, the owner may tighten the set-aside at any point during the compliance period

Answer

Yes, but only with IRS written approval

Answer

Yes, but only during the first three years of the credit period

Question 4

A household's income must be verified using third-party documentation. Which of the following is NOT an acceptable primary income verification method under LIHTC rules?

Accepted Answer

Tenant's self-certification alone with no supporting documents

Answer

Written verification from the employer

Answer

Copies of signed federal tax returns

Answer

Third-party verification from the Social Security Administration

Question 5

Which of the following correctly describes a 'deep rent skewed' project under IRC §42(g)(4)?

Accepted Answer

At least 15% of the low-income units are rent-restricted to 40% AMI tenants and at least 40% of units are low-income

Answer

At least 20% of units serve households at 50% AMI with no other requirements

Answer

All units must serve households at or below 30% AMI

Answer

At least 25% of units must be rented below market rate with no income restriction

Question 6

For LIHTC projects using HOME funds, which income limit generally governs when HOME and LIHTC requirements differ?

Accepted Answer

The more restrictive of the two applicable limits must be applied to the unit

Answer

HOME limits always take precedence over LIHTC limits

Answer

LIHTC limits always take precedence over HOME limits

Answer

The owner may choose which program's limit to apply on a unit-by-unit basis

Question 7

A LIHTC property that was financed with tax-exempt bonds is eligible for what percentage of the 4% credit without competing for a state allocation?

Accepted Answer

50% of the project's eligible basis must be financed with tax-exempt bonds to receive the full 4% credit automatically

Answer

Any amount of tax-exempt bond financing triggers the 4% credit with no threshold

Answer

The project must be 100% tax-exempt bond financed to receive the 4% credit

Answer

Only 25% of eligible basis needs to be bond-financed for the 4% credit