NAHP Affordable Housing Programs & Regulations 2 — Questions and Answers
Question 1: Under the HOME Investment Partnerships Program, what is the minimum percentage of funds that must be used for housing that benefits very low-income households (at or below 50% AMI)?
- 15%
- 25% (Correct answer)
- 50%
- 75%
Correct answer: 25%
HOME requires that at least 25% of each participating jurisdiction's HOME allocation benefit very low-income households at or below 50% of AMI.
Question 2: Which federal program provides interest rate subsidies to enable below-market-rate mortgages for affordable homeownership, often used in conjunction with HOME funds?
- Section 8 Vouchers
- Section 502 Direct Loan Program (Correct answer)
- Choice Neighborhoods Initiative
- HOPE VI
Correct answer: Section 502 Direct Loan Program
The USDA Section 502 Direct Loan Program provides payment assistance and low-interest loans to very low and low-income rural homebuyers.
Question 3: The Low-Income Housing Tax Credit (LIHTC) 4% credit is typically paired with which type of bond financing?
- General obligation bonds
- Tax-exempt private activity bonds (Correct answer)
- Revenue bonds
- Build America Bonds
Correct answer: Tax-exempt private activity bonds
The 4% LIHTC is automatically triggered (non-competitive) when at least 50% of a project's aggregate basis is financed with tax-exempt private activity bonds.
Question 4: Under Fair Housing Act provisions, which of the following is NOT a protected class at the federal level?
- National origin
- Source of income (Correct answer)
- Disability
- Familial status
Correct answer: Source of income
Source of income (e.g., housing vouchers) is not a federally protected class under the Fair Housing Act, though many states and localities have added this protection.
Question 5: What is the primary purpose of a Consolidated Plan required by HUD for entitlement communities?
- To set local property tax rates for affordable units
- To identify community needs and allocate CDBG, HOME, and other HUD funds (Correct answer)
- To certify LIHTC qualified allocations
- To establish rent control ordinances
Correct answer: To identify community needs and allocate CDBG, HOME, and other HUD funds
The Consolidated Plan is a strategic planning document that assesses housing and community development needs and directs the use of federal HUD formula grants.
Question 6: In the LIHTC program, what does the term 'basis' refer to?
- The annual rent collected from tenants
- The eligible costs of acquiring and constructing a housing project used to calculate the credit amount (Correct answer)
- The number of low-income units in a building
- The developer's equity contribution
Correct answer: The eligible costs of acquiring and constructing a housing project used to calculate the credit amount
In LIHTC, 'basis' refers to the qualified basis — eligible development costs attributable to low-income units — which is multiplied by the applicable credit percentage to determine annual tax credits.
Question 7: Which HUD program specifically targets neighborhoods with severely distressed public housing and requires a 'transformation plan' for revitalization?
- Section 202
- HOPE VI / Choice Neighborhoods (Correct answer)
- Moving to Work (MTW)
- Section 811
Correct answer: HOPE VI / Choice Neighborhoods
HOPE VI (and its successor, Choice Neighborhoods) targets severely distressed public housing for demolition and mixed-income redevelopment supported by transformation plans.
NAHP Affordable Housing Programs & Regulations 2
Under the HOME Investment Partnerships Program, what is the minimum percentage of funds that must be used for housing that benefits very low-income households (at or below 50% AMI)?