HCCP Verified Multiple Choice and Conceptual Actual
Emended Exam Questions With Reviewed 100%
Correct Detailed Answers
Guaranteed Pass!!Current Update
1. Which form must state agencies file with the IRS to report noncompliance in
LIHTC properties?
A) Form 8821
B) Form 8823
C) Form 1099
D) Form 50059
Answer: B) Form 8823
Rationale: Form 8823, “Low-Income Housing Credit Agencies Report of
Noncompliance,” is used to notify the IRS of LIHTC noncompliance.
2. Which of the following is not a reason for a state HFA to file Form 8823?
A) Household income above limits
B) Failure to maintain safe and sanitary conditions
C) Rent charged above LIHTC limits
D) Vacant unit due to a natural disaster
Answer: D) Vacant unit due to a natural disaster
Rationale: Vacancies caused by disasters are generally not reported as
noncompliance.
3. Under HUD Handbook 4350.3, how often must income be reverified for tenants
in LIHTC properties?
A) Monthly
B) Annually
C) Every 3 years
,D) Only at move-in
Answer: B) Annually
Rationale: Recertifications are required annually unless the property qualifies for
an exception.
4. According to IRS rules, how long must an owner retain tenant income
certifications (TICs) and supporting documentation?
A) 2 years
B) 5 years
C) 6 years beyond the due date for filing tax returns
D) No retention required
Answer: C) 6 years beyond the due date
Rationale: Owners must keep records for at least 6 years after the due date for the
filing year.
5. If a household is found to be over income, the unit must follow what rule to
remain in compliance?
A) Gross Rent Floor Rule
B) Next Available Unit Rule
C) Extended Use Period Rule
D) Available Income Rule
Answer: B) Next Available Unit Rule
Rationale: The NAUR requires the next available comparable unit to be rented to
an income-qualified household.
6. When HUD updates the HUD Handbook 4350.3, what happens to LIHTC income
and asset rules?
A) They remain unchanged
B) They automatically update to match
C) Owners may choose whether to adopt changes
,D) They expire immediately
Answer: B) They automatically update
Rationale: LIHTC compliance follows changes to HUD 4350.3 income and asset
rules.
7. Which of the following documents is required in a Tenant Income Certification
(TIC) file?
A) Household application & questionnaire
B) Verification of income and assets
C) Student status verification
D) All of the above
Answer: D) All of the above
Rationale: Each TIC must contain these documents to be valid.
8. If noncompliance is corrected after a Form 8823 is filed, how does the HFA
report it?
A) No further reporting is needed
B) Submit a correction on Form 50059
C) File a corrected Form 8823
D) Notify the IRS by letter only
Answer: C) File a corrected Form 8823
Rationale: The HFA must file a subsequent Form 8823 showing compliance
restored.
9. What is the penalty to the owner if noncompliance is reported and not
corrected?
A) Loss of all credits for the property
B) Recapture of credits for the noncompliant unit(s)
C) Automatic foreclosure
D) Fine assessed to the property manager
, Answer: B) Recapture of credits for the noncompliant unit(s)
Rationale: Only credits tied to noncompliant units are at risk unless issues are
widespread.
10. Which verification source is not acceptable for income under HUD 4350.3
rules?
A) Third-party written verification
B) Tenant-provided pay stubs
C) Verbal verification documented by the owner
D) Tenant’s verbal statement without documentation
Answer: D) Tenant’s verbal statement
Rationale: Income must be verified through reliable documentation.
11. What must an HFA do if a property repeatedly fails to correct noncompliance?
A) Terminate the owner’s tax credits immediately
B) Notify HUD to assume oversight
C) Continue filing Form 8823 until resolved
D) Offer the property additional credits
Answer: C) Continue filing Form 8823 until resolved
Rationale: Ongoing noncompliance must be reported until fully corrected.
12. Under HUD 4350.3, unborn children count as:
A) Not part of the household until birth
B) A household member for occupancy and income limits
C) Only counted if both parents live in the unit
D) A dependent but not a household member
Answer: B) A household member
Rationale: Unborn children are counted for LIHTC occupancy and income
eligibility.
Emended Exam Questions With Reviewed 100%
Correct Detailed Answers
Guaranteed Pass!!Current Update
1. Which form must state agencies file with the IRS to report noncompliance in
LIHTC properties?
A) Form 8821
B) Form 8823
C) Form 1099
D) Form 50059
Answer: B) Form 8823
Rationale: Form 8823, “Low-Income Housing Credit Agencies Report of
Noncompliance,” is used to notify the IRS of LIHTC noncompliance.
2. Which of the following is not a reason for a state HFA to file Form 8823?
A) Household income above limits
B) Failure to maintain safe and sanitary conditions
C) Rent charged above LIHTC limits
D) Vacant unit due to a natural disaster
Answer: D) Vacant unit due to a natural disaster
Rationale: Vacancies caused by disasters are generally not reported as
noncompliance.
3. Under HUD Handbook 4350.3, how often must income be reverified for tenants
in LIHTC properties?
A) Monthly
B) Annually
C) Every 3 years
,D) Only at move-in
Answer: B) Annually
Rationale: Recertifications are required annually unless the property qualifies for
an exception.
4. According to IRS rules, how long must an owner retain tenant income
certifications (TICs) and supporting documentation?
A) 2 years
B) 5 years
C) 6 years beyond the due date for filing tax returns
D) No retention required
Answer: C) 6 years beyond the due date
Rationale: Owners must keep records for at least 6 years after the due date for the
filing year.
5. If a household is found to be over income, the unit must follow what rule to
remain in compliance?
A) Gross Rent Floor Rule
B) Next Available Unit Rule
C) Extended Use Period Rule
D) Available Income Rule
Answer: B) Next Available Unit Rule
Rationale: The NAUR requires the next available comparable unit to be rented to
an income-qualified household.
6. When HUD updates the HUD Handbook 4350.3, what happens to LIHTC income
and asset rules?
A) They remain unchanged
B) They automatically update to match
C) Owners may choose whether to adopt changes
,D) They expire immediately
Answer: B) They automatically update
Rationale: LIHTC compliance follows changes to HUD 4350.3 income and asset
rules.
7. Which of the following documents is required in a Tenant Income Certification
(TIC) file?
A) Household application & questionnaire
B) Verification of income and assets
C) Student status verification
D) All of the above
Answer: D) All of the above
Rationale: Each TIC must contain these documents to be valid.
8. If noncompliance is corrected after a Form 8823 is filed, how does the HFA
report it?
A) No further reporting is needed
B) Submit a correction on Form 50059
C) File a corrected Form 8823
D) Notify the IRS by letter only
Answer: C) File a corrected Form 8823
Rationale: The HFA must file a subsequent Form 8823 showing compliance
restored.
9. What is the penalty to the owner if noncompliance is reported and not
corrected?
A) Loss of all credits for the property
B) Recapture of credits for the noncompliant unit(s)
C) Automatic foreclosure
D) Fine assessed to the property manager
, Answer: B) Recapture of credits for the noncompliant unit(s)
Rationale: Only credits tied to noncompliant units are at risk unless issues are
widespread.
10. Which verification source is not acceptable for income under HUD 4350.3
rules?
A) Third-party written verification
B) Tenant-provided pay stubs
C) Verbal verification documented by the owner
D) Tenant’s verbal statement without documentation
Answer: D) Tenant’s verbal statement
Rationale: Income must be verified through reliable documentation.
11. What must an HFA do if a property repeatedly fails to correct noncompliance?
A) Terminate the owner’s tax credits immediately
B) Notify HUD to assume oversight
C) Continue filing Form 8823 until resolved
D) Offer the property additional credits
Answer: C) Continue filing Form 8823 until resolved
Rationale: Ongoing noncompliance must be reported until fully corrected.
12. Under HUD 4350.3, unborn children count as:
A) Not part of the household until birth
B) A household member for occupancy and income limits
C) Only counted if both parents live in the unit
D) A dependent but not a household member
Answer: B) A household member
Rationale: Unborn children are counted for LIHTC occupancy and income
eligibility.
