HCCP- LIHTC COMPLIANCE EXAM
QUESTIONSAND ANSWERS.
Tax Credits can be involved in: Answer - -New construction of a property
-Rehab of a currently owned property
-Acquisition of an existing property (only if it's also rehabbed)
HFA responsibilities : Answer - 1.Allocation of Credits
-Each year, each state is given a certain amount of credits to distribute or
allocate to developers. Under IRC §42(h)—the amount of credit available to the state for
allocation to taxpayers for any calendar year is the "credit ceiling". This amount is
awarded per capita (population) and may be adjusted for inflation each year.
2.State HFA's issue the 9% tax credits through a competitive bid cycle and outlines their
criteria and regulations in a Qualified Allocation Plan
The following "game plan" is used by the states to decide who gets credits using a
scoring system. Answer - -Identify the selection criteria to be used for determining
housing priorities that are appropriate to local conditions Give preference to projects
serving the lowest income tenants, for the longest periods, located in qualified census
tracts and which will contribute to a concerted
community revitalization plan
-Provide procedures the state agency will follow to
monitor the project for continuous compliance with IRC §42 requirements and notify the
IRS if noncompliance occurs
What happens when a non compliance is identified? Answer - When non-compliance is
identified or the state agency becomes aware of a disposition of a building, the state
agencies are required to notify the Internal Revenue Service using Form 8823, the form
that Low Income Housing Credit Agencies use to report non-compliance or building
disposition.
8
The 3rd party contractor acts as the state agent and can perform all of the state's
monitoring duties except: Answer - issuing the notices of non-compliance, the 8823.
LURA Answer - Land Use Restriction Agreement
QUESTIONSAND ANSWERS.
Tax Credits can be involved in: Answer - -New construction of a property
-Rehab of a currently owned property
-Acquisition of an existing property (only if it's also rehabbed)
HFA responsibilities : Answer - 1.Allocation of Credits
-Each year, each state is given a certain amount of credits to distribute or
allocate to developers. Under IRC §42(h)—the amount of credit available to the state for
allocation to taxpayers for any calendar year is the "credit ceiling". This amount is
awarded per capita (population) and may be adjusted for inflation each year.
2.State HFA's issue the 9% tax credits through a competitive bid cycle and outlines their
criteria and regulations in a Qualified Allocation Plan
The following "game plan" is used by the states to decide who gets credits using a
scoring system. Answer - -Identify the selection criteria to be used for determining
housing priorities that are appropriate to local conditions Give preference to projects
serving the lowest income tenants, for the longest periods, located in qualified census
tracts and which will contribute to a concerted
community revitalization plan
-Provide procedures the state agency will follow to
monitor the project for continuous compliance with IRC §42 requirements and notify the
IRS if noncompliance occurs
What happens when a non compliance is identified? Answer - When non-compliance is
identified or the state agency becomes aware of a disposition of a building, the state
agencies are required to notify the Internal Revenue Service using Form 8823, the form
that Low Income Housing Credit Agencies use to report non-compliance or building
disposition.
8
The 3rd party contractor acts as the state agent and can perform all of the state's
monitoring duties except: Answer - issuing the notices of non-compliance, the 8823.
LURA Answer - Land Use Restriction Agreement
