HCCP Regulatory Compliance 4

Question 1

Under the 'available unit rule,' when an over-income tenant's unit becomes vacant, who must the owner rent the next available comparable unit to?

Accepted Answer

A qualified low-income tenant

Answer

The available unit rule requires that the next available comparable or smaller unit be rented to a qualified low-income tenant whenever a current tenant's income exceeds 140% of the qualifying limit.

Question 2

Which of the following events would most likely trigger a recapture of LIHTC credits under IRC §42(j)?

Accepted Answer

Disposing of the building before the end of the compliance period without a qualifying transfer

Answer

IRC §42(j) imposes accelerated recapture of credits when an owner disposes of the building (e.g., through sale) before the 15-year compliance period ends without a qualifying transfer.

Question 3

What is the correct treatment of a student household under LIHTC rules if all members are full-time students?

Accepted Answer

The unit generally does not qualify as a low-income unit unless an exception applies

Answer

IRC §42(i)(3)(D) generally disqualifies units occupied entirely by full-time students unless one of several specific exceptions (e.g., single parent, former foster youth, TANF recipient) applies.

Question 4

An owner places a residential rental building in service in June of Year 1. Under the first-year convention, how many months of credit can the owner claim in Year 1?

Accepted Answer

7 months

Answer

Under the first-year convention (mid-month rule under Treas. Reg. §1.42-5), credit is calculated as if the building was placed in service on the first day of the following month, yielding 7 months (June through December) in a June placement year.

Question 5

A LIHTC property manager discovers that tenant income certifications were not obtained at move-in for three tenants in Year 2. Under IRS guidance, what is the owner's best course of action?

Accepted Answer

Obtain retroactive certifications immediately and document corrective action to present to the state agency

Answer

When certifications are missing, the owner should obtain them as quickly as possible and document the corrective steps, which may allow the state agency to close out the noncompliance without IRS notification.

(HCCP) Housing Credit Certified Professional Practice Test

(HCCP) Housing Credit Certified Professional Practice Test

HCCP Regulatory Compliance 4