TCS Rent and Utility Allowances 2 — Questions and Answers
Question 1: The gross rent floor for a LIHTC project is established at:
- The date the building is placed in service
- The date the Form 8609 is filed
- The date the project receives its allocation (Correct answer)
- The first day of the compliance period
Correct answer: The date the project receives its allocation
The gross rent floor is set on the date the project receives its LIHTC allocation, protecting owners from rent reductions caused by AMI decreases.
Question 2: The gross rent floor provision protects owners by ensuring:
- Rents can never decrease even if AMI drops (Correct answer)
- Tenants can never pay more than the maximum rent
- Owners can charge market rent after 15 years
- Utility allowances cannot exceed 30% of income
Correct answer: Rents can never decrease even if AMI drops
The gross rent floor ensures that if the published AMI decreases, rents do not fall below the level established at the time of the project's allocation.
Question 3: Which bedroom size is used to determine the income limit for a studio (zero-bedroom) unit?
- One-person household income limit (Correct answer)
- Two-person household income limit
- The 1.5-person average is used
- The limit for one occupant is used directly
Correct answer: One-person household income limit
For zero-bedroom units, the income limit is based on a one-person household, while rent limits are based on assumed 1.5 persons.
Question 4: If a property owner provides an owner-paid utility allowance to a tenant, the amount provided:
- Is added to the tenant's income
- Reduces the maximum allowable contract rent (Correct answer)
- Is excluded from gross rent calculations
- Must equal the HFA-published utility allowance exactly
Correct answer: Reduces the maximum allowable contract rent
When an owner provides a utility allowance directly to tenants, it reduces the maximum contract rent that can be charged to keep gross rent within limits.
Question 5: How are bedroom sizes assigned for rent limit purposes when a LIHTC unit is intended for persons with disabilities?
- Units are counted at zero bedrooms regardless of size
- The actual bedroom count of the unit determines the limit (Correct answer)
- The number of accessible features determines the rent limit
- The owner may choose any applicable bedroom category
Correct answer: The actual bedroom count of the unit determines the limit
Rent limits are always based on the actual physical bedroom count of the unit, regardless of the intended occupant or accessibility features.
Question 6: A property charges $800 per month for a one-bedroom unit where the tenant pays all utilities. The applicable utility allowance is $150. What is the gross rent?
- $800
- $650
- $950 (Correct answer)
- $1,050
Correct answer: $950
Gross rent equals the contract rent of $800 plus the utility allowance of $150, totaling $950.
TCS Rent and Utility Allowances 2
The gross rent floor for a LIHTC project is established at: