NCHM Tax Credit Specialist Exam | Latest Update 2026/2027
| 200 Questions and Verified Answers | Complete Q&A Guide
| A+ Graded
1. Who is responsible for most of the regulatory administration of the LowIncome Housing Tax Credit
Programs?
A. U.S. Department of Housing and Urban Development (HUD)
B. Internal Revenue Service (IRS)
C. State Housing Finance Agencies (SHFA)
D. Local zoning boards
Answer: C
Explanation: While the IRS oversees the LIHTC program at the federal level and issues regulations, most
of the regulatory administration is carried out by State Housing Finance Agencies (SHFAs). SHFAs
allocate tax credits, monitor compliance, conduct inspections, and ensure properties meet program
requirements throughout the compliance period.
2. The initial Compliance Period for LIHTC properties combined with the Extended Use Period must be
for a minimum period of affordability at:
A. 15 years
B. 30 years
C. 45 years
D. 99 years
Answer: B
Explanation: LIHTC properties must remain affordable for a minimum of 30 years when combining the
initial 15year Compliance Period with the Extended Use Period.
,3. Which section of the Internal Revenue Code establishes the LowIncome Housing Tax Credit (LIHTC)
program?
A. Section 45
B. Section 42
C. Section 48
D. Section 121
Answer: B
Explanation: The LIHTC program is governed by Section 42 of the Internal Revenue Code.
4. The LIHTC regulations require that HUD guidance for properly identifying and calculating income and
assets be followed according to:
A. HUD Handbook 4350.1
B. HUD Handbook 4350.3 REV1
C. HUD Handbook 4225.1
D. HUD Handbook 7460.8
Answer: B
Explanation: HUD Handbook 4350.3 REV1 provides the guidance for properly identifying and calculating
income and assets for LIHTC properties.
5. Use of HUD's EIV system for LIHTC income verifications is:
A. Required for all properties
B. Permitted with owner approval
,C. Prohibited for LIHTC income verifications
D. Optional at the property manager's discretion
Answer: C
Explanation: The use of HUD's Enterprise Income Verification (EIV) system is prohibited for LIHTC income
verifications.
6. LIHTC legislation provisions include all of the following EXCEPT:
A. HERA
B. ARRA
C. VAWA
D. ADA
Answer: D
Explanation: LIHTC legislation provisions include HERA (Housing and Economic Recovery Act), ARRA
(American Recovery and Reinvestment Act), and VAWA (Violence Against Women Act). The ADA
(Americans with Disabilities Act) is not specific LIHTC legislation.
7. The first 3 stages in the life of a LIHTC property generally occur within:
A. 1 year
B. 2 years
C. 3 years
D. 5 years
Answer: C
Explanation: The first 3 stages in the life of a LIHTC property generally occur within 3 years.
, 8. A reservation letter received at the end of the application stage for LIHTC means that:
A. The property has been fully approved for tax credits
B. A portion of that year's tax credits will be held in reserve for a project
C. The project has been placed in service
D. The compliance period has begun
Answer: B
Explanation: A reservation letter received at the end of the application stage for LIHTC means that a
portion of that year's tax credits will be held in reserve for a project.
9. Carryover Allocations are issued by State Housing Finance Agencies (SHFA) for LIHTC projects when:
A. The project is placed in service
B. Their 10% tests have been met
C. The compliance period begins
D. The application is first submitted
Answer: B
Explanation: Carryover Allocations are issued by State Housing Finance Agencies for LIHTC projects when
their 10% tests have been met.
10. Acquisition/rehab projects generally place in service at acquisition and are given:
A. 120 days before acquisition
| 200 Questions and Verified Answers | Complete Q&A Guide
| A+ Graded
1. Who is responsible for most of the regulatory administration of the LowIncome Housing Tax Credit
Programs?
A. U.S. Department of Housing and Urban Development (HUD)
B. Internal Revenue Service (IRS)
C. State Housing Finance Agencies (SHFA)
D. Local zoning boards
Answer: C
Explanation: While the IRS oversees the LIHTC program at the federal level and issues regulations, most
of the regulatory administration is carried out by State Housing Finance Agencies (SHFAs). SHFAs
allocate tax credits, monitor compliance, conduct inspections, and ensure properties meet program
requirements throughout the compliance period.
2. The initial Compliance Period for LIHTC properties combined with the Extended Use Period must be
for a minimum period of affordability at:
A. 15 years
B. 30 years
C. 45 years
D. 99 years
Answer: B
Explanation: LIHTC properties must remain affordable for a minimum of 30 years when combining the
initial 15year Compliance Period with the Extended Use Period.
,3. Which section of the Internal Revenue Code establishes the LowIncome Housing Tax Credit (LIHTC)
program?
A. Section 45
B. Section 42
C. Section 48
D. Section 121
Answer: B
Explanation: The LIHTC program is governed by Section 42 of the Internal Revenue Code.
4. The LIHTC regulations require that HUD guidance for properly identifying and calculating income and
assets be followed according to:
A. HUD Handbook 4350.1
B. HUD Handbook 4350.3 REV1
C. HUD Handbook 4225.1
D. HUD Handbook 7460.8
Answer: B
Explanation: HUD Handbook 4350.3 REV1 provides the guidance for properly identifying and calculating
income and assets for LIHTC properties.
5. Use of HUD's EIV system for LIHTC income verifications is:
A. Required for all properties
B. Permitted with owner approval
,C. Prohibited for LIHTC income verifications
D. Optional at the property manager's discretion
Answer: C
Explanation: The use of HUD's Enterprise Income Verification (EIV) system is prohibited for LIHTC income
verifications.
6. LIHTC legislation provisions include all of the following EXCEPT:
A. HERA
B. ARRA
C. VAWA
D. ADA
Answer: D
Explanation: LIHTC legislation provisions include HERA (Housing and Economic Recovery Act), ARRA
(American Recovery and Reinvestment Act), and VAWA (Violence Against Women Act). The ADA
(Americans with Disabilities Act) is not specific LIHTC legislation.
7. The first 3 stages in the life of a LIHTC property generally occur within:
A. 1 year
B. 2 years
C. 3 years
D. 5 years
Answer: C
Explanation: The first 3 stages in the life of a LIHTC property generally occur within 3 years.
, 8. A reservation letter received at the end of the application stage for LIHTC means that:
A. The property has been fully approved for tax credits
B. A portion of that year's tax credits will be held in reserve for a project
C. The project has been placed in service
D. The compliance period has begun
Answer: B
Explanation: A reservation letter received at the end of the application stage for LIHTC means that a
portion of that year's tax credits will be held in reserve for a project.
9. Carryover Allocations are issued by State Housing Finance Agencies (SHFA) for LIHTC projects when:
A. The project is placed in service
B. Their 10% tests have been met
C. The compliance period begins
D. The application is first submitted
Answer: B
Explanation: Carryover Allocations are issued by State Housing Finance Agencies for LIHTC projects when
their 10% tests have been met.
10. Acquisition/rehab projects generally place in service at acquisition and are given:
A. 120 days before acquisition
