LIHTC Overview of California Low-Income Housing Tax Credit Program 5

Question 1

Which federal law created the Low-Income Housing Tax Credit program?

Accepted Answer

The Tax Reform Act of 1986

Answer

The LIHTC program was created by the Tax Reform Act of 1986 and is codified under IRC Section 42.

Question 2

A California LIHTC project must submit annual compliance reports to CTCAC that include which of the following?

Accepted Answer

Tenant income certifications and unit vacancy data

Answer

Owners must annually certify tenant incomes and report unit occupancy to demonstrate ongoing compliance with set-aside requirements.

Question 3

In a California LIHTC partnership, the 'general partner' typically:

Accepted Answer

Manages the project and bears unlimited liability for partnership obligations

Answer

The general partner (usually the developer or an affiliated entity) controls operations and carries unlimited liability in the limited partnership structure.

Question 4

Under California LIHTC rules, if a LIHTC unit becomes vacant, the owner must continue treating it as a low-income unit for compliance purposes unless:

Accepted Answer

The owner makes reasonable attempts to rent it and the next available comparable unit is rented to a qualifying tenant

Answer

The Vacant Unit Rule allows a temporarily vacant unit to remain in compliance if the owner actively markets it and rents the next comparable unit to a qualifying household.

Question 5

What does CTCAC consider when scoring a LIHTC application under the 'leveraging' criterion?

Accepted Answer

The amount of non-LIHTC funding sources contributing to total project cost

Answer

Leveraging scoring rewards applications that bring in significant outside funding—such as HOME funds, AHP grants, or local subsidies—reducing reliance on LIHTC equity alone.

(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 5