NAHP Affordable Housing Programs & Regulations 5 — Questions and Answers
Question 1: What does 'affirmatively furthering fair housing' (AFFH) require of HUD grantees?
- Building a fixed percentage of units in every census tract
- Taking meaningful actions to overcome patterns of segregation and foster inclusive communities (Correct answer)
- Prohibiting market-rate development in low-income areas
- Requiring all tenants to sign affirmative action agreements
Correct answer: Taking meaningful actions to overcome patterns of segregation and foster inclusive communities
AFFH requires HUD grantees to analyze fair housing impediments and take proactive steps to overcome segregation, promote integration, and address disparate housing needs.
Question 2: The Uniform Relocation Assistance and Real Property Acquisition Policies Act (URA) is triggered when:
- A landlord voluntarily renovates an affordable unit
- A federally funded project requires displacement of residents or acquisition of occupied property (Correct answer)
- A tenant earning above 80% AMI moves out of an assisted unit
- A PHA updates its annual plan
Correct answer: A federally funded project requires displacement of residents or acquisition of occupied property
The URA applies when federal financial assistance is used in a project that involves acquisition of real property or displacement of persons, requiring relocation assistance and payments.
Question 3: In a tax credit project using the 'income averaging' set-aside, what is the average AMI limit that must be maintained across all designated units?
- 50% AMI
- 60% AMI (Correct answer)
- 80% AMI
- 70% AMI
Correct answer: 60% AMI
The income averaging set-aside, added by the Consolidated Appropriations Act of 2018, requires that the average AMI across all income-restricted units not exceed 60% AMI.
Question 4: Section 3 of the Housing and Urban Development Act of 1968 requires that contractors on HUD-funded projects prioritize employment and contracting opportunities for:
- HUD-certified contractors regardless of location
- Low- and very low-income persons, particularly public housing residents and Section 8 recipients (Correct answer)
- Minority-owned businesses only
- Union labor certified by the Department of Labor
Correct answer: Low- and very low-income persons, particularly public housing residents and Section 8 recipients
Section 3 mandates that economic opportunities from HUD-assisted construction and rehabilitation be directed, to the greatest extent feasible, to low- and very low-income workers and businesses.
Question 5: A tenant in a LIHTC-assisted unit whose income rises above 140% of the applicable income limit is subject to which rule?
- Immediate eviction from the unit
- Next available unit rule — the next available comparable unit must be rented to a qualified low-income household (Correct answer)
- Automatic rent increase to market rate
- Mandatory transfer to a Section 8 voucher
Correct answer: Next available unit rule — the next available comparable unit must be rented to a qualified low-income household
The Next Available Unit (NAU) rule requires that when an over-income tenant occupies a LIHTC unit, the next available unit of comparable or smaller size must be rented to a qualified low-income household.
Question 6: Which of the following best describes the purpose of a Land Use Restriction Agreement (LURA) in a LIHTC project?
- It governs the construction contract between the developer and general contractor
- It is a recorded deed restriction that enforces long-term affordability requirements on the property (Correct answer)
- It establishes the rent schedule negotiated between HUD and the owner
- It is an agreement between the PHA and the state to share voucher funds
Correct answer: It is a recorded deed restriction that enforces long-term affordability requirements on the property
A LURA is a recorded legal agreement between the owner and the state housing finance agency that runs with the land and enforces LIHTC income and rent restrictions for the required compliance and extended use periods.
Question 7: The Community Development Block Grant (CDBG) program requires that at least what percentage of funds benefit low- and moderate-income persons?
- 51%
- 60%
- 70%
- 80% (Correct answer)
Correct answer: 80%
CDBG regulations require that at least 70% of CDBG expenditures over a one-, two-, or three-year period benefit low- and moderate-income persons.
NAHP Affordable Housing Programs & Regulations 5
What does 'affirmatively furthering fair housing' (AFFH) require of HUD grantees?