LIHTC Overview of California Low-Income Housing Tax Credit Program 3

Question 1

California's state LIHTC program provides credits that are used in conjunction with federal credits. What is the primary benefit of combining state and federal LIHTCs?

Accepted Answer

It increases total equity raised, enabling deeper affordability or more units

Answer

Layering state and federal credits raises more equity from investors, allowing developers to serve lower incomes, reduce debt, or increase unit counts.

Question 2

Under California's LIHTC income averaging option, what is the average AMI limit that the project's units must collectively meet?

Accepted Answer

60% AMI

Answer

Income averaging requires that the average AMI of designated units does not exceed 60%, with individual units ranging from 20% to 80% AMI.

Question 3

What is the primary purpose of the CTCAC's Opportunity Map used in California's LIHTC program?

Accepted Answer

To identify high-opportunity areas that receive location-based scoring incentives

Answer

The Opportunity Map designates areas by resource level (high, moderate, low) to guide LIHTC awards toward high-opportunity neighborhoods.

Question 4

When a LIHTC project is placed in service, what document does the developer file with CTCAC to claim the credit?

Accepted Answer

IRS Form 8609

Answer

IRS Form 8609 (Low-Income Housing Credit Allocation and Certification) is issued by CTCAC and filed by the developer to claim the tax credit.

Question 5

Under federal LIHTC rules, what happens to credits if a building's qualified basis decreases during the compliance period?

Accepted Answer

A portion of credits previously claimed must be recaptured with interest

Answer

A decrease in qualified basis triggers recapture of a portion of prior-year credits plus interest under IRC Section 42(j).

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

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

LIHTC Overview of California Low-Income Housing Tax Credit Program 3