TCS Rent and Utility Allowances

Question 1

Under LIHTC rules, what is the maximum gross rent allowed for a 60% AMI two-bedroom unit?

Accepted Answer

30% of 60% AMI adjusted for unit size

Answer

60% of the published Fair Market Rent

Answer

The HUD Fair Market Rent for the area

Answer

50% of the published Area Median Income

Question 2

Gross rent for LIHTC purposes includes:

Accepted Answer

Contract rent plus the utility allowance

Answer

Contract rent only

Answer

Contract rent minus any tenant-paid utilities

Answer

Only utility allowances provided by the owner

Question 3

Which agency is responsible for publishing the utility allowances used at most LIHTC properties?

Accepted Answer

The state housing finance agency (HFA)

Answer

The IRS

Answer

HUD directly

Answer

The local public housing authority

Question 4

If a tenant pays all utilities, the utility allowance must be:

Accepted Answer

Added to the rent when checking gross rent limits

Answer

Subtracted from the rent when checking gross rent limits

Answer

Ignored since the tenant pays utilities

Answer

Applied only at annual recertification

Question 5

How often must utility allowances be updated at LIHTC properties?

Accepted Answer

Annually

Answer

Every five years

Answer

Only when HUD publishes new FMRs

Answer

At each tenant recertification

Question 6

What happens to gross rent compliance if a utility allowance increases and pushes gross rent above the maximum?

Accepted Answer

The owner must reduce contract rent to bring gross rent back into compliance

Answer

The tenant must absorb the increased utility cost

Answer

The unit is automatically decertified

Answer

A waiver can be filed with the IRS