LIHTC Financial Management & Tax Credit Allocation 2

Question 1

California's TCAC uses a 'tie-breaker' scoring system when projects have equal scores. What is the primary tie-breaker used?

Accepted Answer

Lowest requested credit per unit

Answer

TCAC uses the lowest credit per unit as the primary tie-breaker to maximize the efficient use of limited tax credit resources.

Question 2

Under IRS rules, what is the minimum number of years a LIHTC project must remain affordable after the initial 15-year compliance period?

Accepted Answer

15 additional years (30 years total)

Answer

The extended use agreement requires an additional 15 years of affordability beyond the initial compliance period, for a minimum of 30 years total.

Question 3

A developer proposes a LIHTC project with a total development cost of $10 million. The eligible basis is $8 million. What is the maximum 9% credit the project could generate annually (before any basis adjustments)?

Accepted Answer

$720,000

Answer

The 9% credit applied to the $8 million eligible basis yields $720,000 annually ($8,000,000 × 0.09).

Question 4

In California LIHTC underwriting, what does TCAC's 'income averaging' election allow a project to do?

Accepted Answer

Serve households at mixed AMI levels averaging to 60% AMI

Answer

Income averaging allows projects to mix units at different AMI levels (e.g., 40%, 60%, 80%) as long as the average does not exceed 60% AMI.

Question 5

Which California state program often pairs with LIHTC to provide construction financing for affordable housing projects?

Accepted Answer

CalHFA Multifamily Programs

Answer

CalHFA (California Housing Finance Agency) multifamily programs frequently provide construction and permanent loans to complement LIHTC equity.

(LIHTC) California Low-Income Housing Tax Credit Exam Practice Test

(LIHTC) California Low-Income Housing Tax Credit Exam Practice Test

LIHTC Financial Management & Tax Credit Allocation 2