LIHTC Property Management & Compliance Monitoring

Question 1

What is the initial compliance period required under IRC Section 42 for LIHTC properties?

Accepted Answer

15 years

Answer

IRC Section 42 mandates a 15-year initial compliance period during which the property must maintain its qualified low-income status to avoid credit recapture.

Question 2

Which California state agency is primarily responsible for monitoring ongoing LIHTC compliance?

Accepted Answer

California Tax Credit Allocation Committee (TCAC)

Answer

TCAC serves as the allocating and monitoring agency for LIHTC in California, conducting audits, inspections, and reporting noncompliance to the IRS.

Question 3

Which IRS form must a state allocating agency file to report a LIHTC noncompliance event?

Accepted Answer

Form 8823

Answer

Form 8823 (Low-Income Housing Credit Agencies Report of Noncompliance or Building Disposition) is filed by the state agency to notify the IRS of any compliance violations.

Question 4

Under IRC Section 42(g), what is the '20-50 test' minimum set-aside requirement for LIHTC projects?

Accepted Answer

20% of units at 50% AMI

Answer

The 20-50 test requires that at least 20% of units be rent-restricted and occupied by households earning no more than 50% of area median income.

Question 5

How is the maximum allowable rent for a LIHTC unit restricted at 60% AMI calculated?

Accepted Answer

30% of 60% of the area median income adjusted for unit size

Answer

LIHTC rents are capped at 30% of the applicable income limit (e.g., 60% AMI), adjusted by a utility allowance and imputed household size based on bedroom count.

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

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

LIHTC Property Management & Compliance Monitoring