LIHTC Self Study Questions And
Answers
Housing btax bcredit bfor ba byear b= b[_________] b? b- bcorrect banswers✔✔"applicable
bpercentage" bof b"qualified bbasis" bof beach b"qualified blow-income bbuilding"
Qualified bbasis b= b[_______] b- bcorrect banswers✔✔"applicable bfraction" bof b"eligible
bbasis"
I.e. bthe bportion bof bthe beligible bbasis battributable bto blow-income bunits b= bqualified
bbasis
Eligible bbasis bincludes b[__] band bexcludes b[__] band breduced bby b[__] b- bcorrect
banswers✔✔Includes:
1. bcost bacquiring
2. bcost bof brehabilitating
3. bcost bof bconstructing bbuilding(s)
AKA b- bif bit's bdepreciable, bit's bincludable bin bEB
Excludes:
1. bcost bof bland
Reduced bby:
1. bamount bof bfederal bgrants bfinancing bconstruction/rehab bcosts
What bis ba bqualified blow-income bbuilding? b- bcorrect banswers✔✔Any bbuilding bwhich
bis bpart bof ba b"qualified blow-income bhousing bproject" bat ball btimes bduring bthe
b"compliance bperiod."
When bdoes bthe bcompliance bperiod bfor ba bqualified blow-income bhousing bproject
bbegin band bend? b- bcorrect banswers✔✔Begins: bfirst btaxable byear bof bthe b10 byear
bcredit bperiod
Ends: b15 btaxable byears blater
Must bqualify bas ba blow-income bhousing bproject bcontinuously bfor bthat b15 byear
bperiod
,What bare bthe b2 bthings bthat ba bproject bmust bbe bin border bto bqualify bas ba b"low-
income bhousing bproject"? b- bcorrect banswers✔✔1. brent brestricted band
2. bsatisfy bone bof bthe bminimum bset-aside btests bof b42g
What bare bthe b3 bminimum bset-aside btests? b- bcorrect banswers✔✔1. b20-50 btest: bAt
bleast b20% bof bthe bresidential bunits bin bthe bproject bmust bbe bboth brent-restricted band
boccupied bby btenants bwhose bGI bis b50% bor bless bof bthe barea bmedian bgross
bincome b(AMGI)
2. b40-60 btest: bAt bleast b40% bof bthe bresidential bunits bin bthe bproject bmust bbe bboth
brent-restricted band boccupied bby btenants bwhose bGI bis b60% bor bless bof bAMGI
3. bAverage bIncome bTest: b40% bor bmore b(25% bif bproject blocated bin bcertain bhigh
bcost bhousing bareas) bof bthe bresidential bunits bin bthe bproject bare brent-restricted band
boccupied bby btenants bwhose bincome bdoes bnot bexceed bthe bimputed bincome
blimitation bdesignated bby bthe btaxpayer bwith brespect bto bthe brespective bunit
What bis brequired bof bthe bimputed bincome blimitations bof bthe baverage bincome btest?
b- bcorrect banswers✔✔Under bthe baverage bincome btest, bthe bTP bmust bdesignate bthe
bimputed bincome blimitation bfor beach bunit band bthat bimputed bincome blimitation bmust
bbe b20, b30, b40, b50, b60, b70, bor b80% bof bAMGI bwith bthe baverage bof bthe bimputed
bincome blimitations bfor beach bunit bmust bnot bexceed b60% bof bAMGI.
NOTE: bthis bessentially bgets byou bto bthe bsame bresult bas bthe b40-60 btest, bbut bwith
bmore bflexibility bfor bAMGI bpercentages bper bunit
What bhappens bif bthe bincome bof bthe boccupant bof ba blow-income bunit brises babove
bthe bapplicable bincome blimitation? b- bcorrect banswers✔✔Generally, bthe bunit bwill
bcontinue bto bbe btreated bas ba blow-income bunit bif bthe bincome bof bthe boccupant
binitially bsatisfied bthe bincome blimitation band bthe bunit bcontinues bto bbe brent
brestricted.
What bhappens bif bthe bincome bof bthe boccupant bof ba blow-income bunit brises babove
bthe bapplicable bincome blimitation bas bdesignated bby bthe bTP bunder b20-50 bor bthe
b40-60 btest? b- bcorrect banswers✔✔The bApplicable bIncome bLimitation bapplies:
The bunit bwill bcontinue bto bbe btreated bas ba blow-income bunit bif bthe bincome bof bthe
boccupants bof ba blow-income bunit bincreases bto bnot bmore bthan b140% bof bthe bincome
blimitation bapplicable bto bthe bunit. b
If bthe bincome bof bthe boccupants bincreases babove b140% bof bthe bapplicable bincome
blimitation, bthe bunit bwill bno blonger bqualify bas ba blow-income bunit bif bany bresidential
brental bunit bof bcomparable bsize bor bsmaller bin bthe bbuilding bis boccupied bby ba bnew
bresident bwhose bincome bexceeds bthe bapplicable bincome blimitation. bThis bis bthe
b"next bavailable bunit brule".
, What bis bthe brent brestriction bunder bthe b20-50 btest band b40-60 btest? b- bcorrect
banswers✔✔Rent brestriction bis b30% bof ba btenant's bimputed bincome blimitation bwhich
bis bgenerally bbased bon bthe bnumber bof bbedrooms bin ba bunit
How bdoes bthe b'next bavailable bunit brule' bwork bfor ba bTP bwho bhas belected bthe
bAverage bIncome bTest? b- bcorrect banswers✔✔A bunit bceases bto bbe ba blow-income
bunit bif:
(i) bthe bincome bof ban boccupant bof ba blow-income bunit bincreases babove b140% bof
bthe bgreater bof b(A) b60% bAMGI, bor b(B) bthe bimputed bincome blimitation bdesignated
bby bthe bTP bwith brespect bto bthat bunit b(AKA bthe bApplicable bImputed bIncome
bLimitation), band b
(ii) bany bother bresidential brental bunit bin bthe bbuilding bthat bis bof bcomparable bsize bor
bsmaller bthan bthat bunit bis boccupied bby ba bnew btenant bwhose bincome bexceeds bthe
bapplicable bimputed bincome blimitation
Under bthe bnext bavailable bunit brule bfor bTP's bwho belected bthe baverage bincome btest,
bhow bis bthe bapplicable bimputed bincome blimitation bdetermined? b- bcorrect
banswers✔✔Ask bif bthe bnew btenant bis boccupying ba blow-income bdesignated bunit bor
ba bmarket-rate bdesignated bunit.
If bthe bnew btenant boccupies ba bunit bthat bwas btaken binto baccount bas ba blow-income
bunit bprior bto bbecoming bvacant: bthe bapplicable bimputed bincome blimitation bis bthe
blimitation bdesignated bwith brespect bto bthe bunit.
If bthe bnew btenant boccupies ba bmarket-rate bunit, bthe bapplicable bimputed bincome
blimtiation bis bthe blimitation bthat bwould bhave bto bbe bdesignated bwith brespect bto bthe
bunit bin border bfor bthe bproject bto bmaintain baverage bdesignations bof b60% bof bAMGI
bor blower.
Can ba bTP bswitch bwhich bset-aside btest bthey buse? b- bcorrect banswers✔✔no, bits
birrevocable
When bmust bthe bTP bprovide bthe bcomplete, binitial bdesignation bof ball bunits btaken
binto baccount bfor bthe baverage bincome btest? b- bcorrect banswers✔✔At bthe bclose bof
bthe bfirst btaxable byear bof bthe bcredit bperiod band bno bchange bto bthe bdesignated
bimputed bincome blimitations bmay bbe bmade
What bhappens bwhen bthe bminimum bset-aside brequirement bof bthe baverage bincome
btest bis bfailed? b- bcorrect banswers✔✔Failure bto b(1) bsatisfy bthe bminimum bset-aside
brequirement, band b(2) ba bresidential brental bunit bin bthe bbuilding bof bcomparable bsize,
bor bsmaller, bthan bthe bunit bthat bexceeds b140% bof bthe bapplicable bincome blimitation,
bwill bresult bin bthat bunit bno blonger bconstituting ba blow-income bunit. b
Answers
Housing btax bcredit bfor ba byear b= b[_________] b? b- bcorrect banswers✔✔"applicable
bpercentage" bof b"qualified bbasis" bof beach b"qualified blow-income bbuilding"
Qualified bbasis b= b[_______] b- bcorrect banswers✔✔"applicable bfraction" bof b"eligible
bbasis"
I.e. bthe bportion bof bthe beligible bbasis battributable bto blow-income bunits b= bqualified
bbasis
Eligible bbasis bincludes b[__] band bexcludes b[__] band breduced bby b[__] b- bcorrect
banswers✔✔Includes:
1. bcost bacquiring
2. bcost bof brehabilitating
3. bcost bof bconstructing bbuilding(s)
AKA b- bif bit's bdepreciable, bit's bincludable bin bEB
Excludes:
1. bcost bof bland
Reduced bby:
1. bamount bof bfederal bgrants bfinancing bconstruction/rehab bcosts
What bis ba bqualified blow-income bbuilding? b- bcorrect banswers✔✔Any bbuilding bwhich
bis bpart bof ba b"qualified blow-income bhousing bproject" bat ball btimes bduring bthe
b"compliance bperiod."
When bdoes bthe bcompliance bperiod bfor ba bqualified blow-income bhousing bproject
bbegin band bend? b- bcorrect banswers✔✔Begins: bfirst btaxable byear bof bthe b10 byear
bcredit bperiod
Ends: b15 btaxable byears blater
Must bqualify bas ba blow-income bhousing bproject bcontinuously bfor bthat b15 byear
bperiod
,What bare bthe b2 bthings bthat ba bproject bmust bbe bin border bto bqualify bas ba b"low-
income bhousing bproject"? b- bcorrect banswers✔✔1. brent brestricted band
2. bsatisfy bone bof bthe bminimum bset-aside btests bof b42g
What bare bthe b3 bminimum bset-aside btests? b- bcorrect banswers✔✔1. b20-50 btest: bAt
bleast b20% bof bthe bresidential bunits bin bthe bproject bmust bbe bboth brent-restricted band
boccupied bby btenants bwhose bGI bis b50% bor bless bof bthe barea bmedian bgross
bincome b(AMGI)
2. b40-60 btest: bAt bleast b40% bof bthe bresidential bunits bin bthe bproject bmust bbe bboth
brent-restricted band boccupied bby btenants bwhose bGI bis b60% bor bless bof bAMGI
3. bAverage bIncome bTest: b40% bor bmore b(25% bif bproject blocated bin bcertain bhigh
bcost bhousing bareas) bof bthe bresidential bunits bin bthe bproject bare brent-restricted band
boccupied bby btenants bwhose bincome bdoes bnot bexceed bthe bimputed bincome
blimitation bdesignated bby bthe btaxpayer bwith brespect bto bthe brespective bunit
What bis brequired bof bthe bimputed bincome blimitations bof bthe baverage bincome btest?
b- bcorrect banswers✔✔Under bthe baverage bincome btest, bthe bTP bmust bdesignate bthe
bimputed bincome blimitation bfor beach bunit band bthat bimputed bincome blimitation bmust
bbe b20, b30, b40, b50, b60, b70, bor b80% bof bAMGI bwith bthe baverage bof bthe bimputed
bincome blimitations bfor beach bunit bmust bnot bexceed b60% bof bAMGI.
NOTE: bthis bessentially bgets byou bto bthe bsame bresult bas bthe b40-60 btest, bbut bwith
bmore bflexibility bfor bAMGI bpercentages bper bunit
What bhappens bif bthe bincome bof bthe boccupant bof ba blow-income bunit brises babove
bthe bapplicable bincome blimitation? b- bcorrect banswers✔✔Generally, bthe bunit bwill
bcontinue bto bbe btreated bas ba blow-income bunit bif bthe bincome bof bthe boccupant
binitially bsatisfied bthe bincome blimitation band bthe bunit bcontinues bto bbe brent
brestricted.
What bhappens bif bthe bincome bof bthe boccupant bof ba blow-income bunit brises babove
bthe bapplicable bincome blimitation bas bdesignated bby bthe bTP bunder b20-50 bor bthe
b40-60 btest? b- bcorrect banswers✔✔The bApplicable bIncome bLimitation bapplies:
The bunit bwill bcontinue bto bbe btreated bas ba blow-income bunit bif bthe bincome bof bthe
boccupants bof ba blow-income bunit bincreases bto bnot bmore bthan b140% bof bthe bincome
blimitation bapplicable bto bthe bunit. b
If bthe bincome bof bthe boccupants bincreases babove b140% bof bthe bapplicable bincome
blimitation, bthe bunit bwill bno blonger bqualify bas ba blow-income bunit bif bany bresidential
brental bunit bof bcomparable bsize bor bsmaller bin bthe bbuilding bis boccupied bby ba bnew
bresident bwhose bincome bexceeds bthe bapplicable bincome blimitation. bThis bis bthe
b"next bavailable bunit brule".
, What bis bthe brent brestriction bunder bthe b20-50 btest band b40-60 btest? b- bcorrect
banswers✔✔Rent brestriction bis b30% bof ba btenant's bimputed bincome blimitation bwhich
bis bgenerally bbased bon bthe bnumber bof bbedrooms bin ba bunit
How bdoes bthe b'next bavailable bunit brule' bwork bfor ba bTP bwho bhas belected bthe
bAverage bIncome bTest? b- bcorrect banswers✔✔A bunit bceases bto bbe ba blow-income
bunit bif:
(i) bthe bincome bof ban boccupant bof ba blow-income bunit bincreases babove b140% bof
bthe bgreater bof b(A) b60% bAMGI, bor b(B) bthe bimputed bincome blimitation bdesignated
bby bthe bTP bwith brespect bto bthat bunit b(AKA bthe bApplicable bImputed bIncome
bLimitation), band b
(ii) bany bother bresidential brental bunit bin bthe bbuilding bthat bis bof bcomparable bsize bor
bsmaller bthan bthat bunit bis boccupied bby ba bnew btenant bwhose bincome bexceeds bthe
bapplicable bimputed bincome blimitation
Under bthe bnext bavailable bunit brule bfor bTP's bwho belected bthe baverage bincome btest,
bhow bis bthe bapplicable bimputed bincome blimitation bdetermined? b- bcorrect
banswers✔✔Ask bif bthe bnew btenant bis boccupying ba blow-income bdesignated bunit bor
ba bmarket-rate bdesignated bunit.
If bthe bnew btenant boccupies ba bunit bthat bwas btaken binto baccount bas ba blow-income
bunit bprior bto bbecoming bvacant: bthe bapplicable bimputed bincome blimitation bis bthe
blimitation bdesignated bwith brespect bto bthe bunit.
If bthe bnew btenant boccupies ba bmarket-rate bunit, bthe bapplicable bimputed bincome
blimtiation bis bthe blimitation bthat bwould bhave bto bbe bdesignated bwith brespect bto bthe
bunit bin border bfor bthe bproject bto bmaintain baverage bdesignations bof b60% bof bAMGI
bor blower.
Can ba bTP bswitch bwhich bset-aside btest bthey buse? b- bcorrect banswers✔✔no, bits
birrevocable
When bmust bthe bTP bprovide bthe bcomplete, binitial bdesignation bof ball bunits btaken
binto baccount bfor bthe baverage bincome btest? b- bcorrect banswers✔✔At bthe bclose bof
bthe bfirst btaxable byear bof bthe bcredit bperiod band bno bchange bto bthe bdesignated
bimputed bincome blimitations bmay bbe bmade
What bhappens bwhen bthe bminimum bset-aside brequirement bof bthe baverage bincome
btest bis bfailed? b- bcorrect banswers✔✔Failure bto b(1) bsatisfy bthe bminimum bset-aside
brequirement, band b(2) ba bresidential brental bunit bin bthe bbuilding bof bcomparable bsize,
bor bsmaller, bthan bthe bunit bthat bexceeds b140% bof bthe bapplicable bincome blimitation,
bwill bresult bin bthat bunit bno blonger bconstituting ba blow-income bunit. b
