1
LIHTC SELF STUDY EXAM NEWEST VERSION -2025/2026- 100+
QUESTIONS AND VERIFIED ANSWERS 100% CORRECT
GUARANTEED SUCCESS
What is required of the imputed income limitations of the average income test?
Under the average income test, the TP must designate the imputed income
limitation for each unit and that imputed income limitation must be 20, 30, 40, 50,
60, 70, or 80% of AMGI with the average of the imputed income limitations for
each unit must not exceed 60% of AMGI.
NOTE: this essentially gets you to the same result as the 40-60 test, but with more
flexibility for AMGI percentages per unit
What happens if the income of the occupant of a low-income unit rises above the
applicable income limitation?
Generally, the unit will continue to be treated as a low-income unit if the income
of the occupant initially satisfied the income limitation and the unit continues to
be rent restricted.
What is a qualified low-income building?
Any building which is part of a "qualified low-income housing project" at all times
during the "compliance period."
When does the compliance period for a qualified low-income housing project
begin and end?
Begins: first taxable year of the 10 year credit period
Ends: 15 taxable years later
Must qualify as a low-income housing project continuously for that 15 year period
, 2
What happens if the income of the occupant of a low-income unit rises above the
applicable income limitation as designated by the TP under 20-50 or the 40-60
test?
The Applicable Income Limitation applies:
The unit will continue to be treated as a low-income unit if the income of the
occupants of a low-income unit increases to not more than 140% of the income
limitation applicable to the unit.
If the income of the occupants increases above 140% of the applicable income
limitation, the unit will no longer qualify as a low-income unit if any residential
rental unit of comparable size or smaller in the building is occupied by a new
resident whose income exceeds the applicable income limitation. This is the "next
available unit rule".
AKA - if it's depreciable, it's includable in EB
Excludes:
1. cost of land
Reduced by:
1. amount of federal grants financing construction/rehab costs
What are the 2 things that a project must be in order to qualify as a "low-income
housing project"?
1. rent restricted and
2. satisfy one of the minimum set-aside tests of 42g
What are the 3 minimum set-aside tests?
, 3
1. 20-50 test: At least 20% of the residential units in the project must be both
rent-restricted and occupied by tenants whose GI is 50% or less of the area
median gross income (AMGI)
2. 40-60 test: At least 40% of the residential units in the project must be both
rent-restricted and occupied by tenants whose GI is 60% or less of AMGI
3. Average Income Test: 40% or more (25% if project located in certain high cost
housing areas) of the residential units in the project are rent-restricted and
occupied by tenants whose income does not exceed the imputed income
limitation designated by the taxpayer with respect to the respective unit
What is the rent restriction under the 20-50 test and 40-60 test?
Rent restriction is 30% of a tenant's imputed income limitation which is generally
based on the number of bedrooms in a unit
How does the 'next available unit rule' work for a TP who has elected the Average
Income Test?
A unit ceases to be a low-income unit if:
(i) the income of an occupant of a low-income unit increases above 140% of the
greater of (A) 60% AMGI, or (B) the imputed income limitation designated by the
TP with respect to that unit (AKA the Applicable Imputed Income Limitation), and
(ii) any other residential rental unit in the building that is of comparable size or
smaller than that unit is occupied by a new tenant whose income exceeds the
applicable imputed income limitation
Under the next available unit rule for TP's who elected the average income test,
how is the applicable imputed income limitation determined?
LIHTC SELF STUDY EXAM NEWEST VERSION -2025/2026- 100+
QUESTIONS AND VERIFIED ANSWERS 100% CORRECT
GUARANTEED SUCCESS
What is required of the imputed income limitations of the average income test?
Under the average income test, the TP must designate the imputed income
limitation for each unit and that imputed income limitation must be 20, 30, 40, 50,
60, 70, or 80% of AMGI with the average of the imputed income limitations for
each unit must not exceed 60% of AMGI.
NOTE: this essentially gets you to the same result as the 40-60 test, but with more
flexibility for AMGI percentages per unit
What happens if the income of the occupant of a low-income unit rises above the
applicable income limitation?
Generally, the unit will continue to be treated as a low-income unit if the income
of the occupant initially satisfied the income limitation and the unit continues to
be rent restricted.
What is a qualified low-income building?
Any building which is part of a "qualified low-income housing project" at all times
during the "compliance period."
When does the compliance period for a qualified low-income housing project
begin and end?
Begins: first taxable year of the 10 year credit period
Ends: 15 taxable years later
Must qualify as a low-income housing project continuously for that 15 year period
, 2
What happens if the income of the occupant of a low-income unit rises above the
applicable income limitation as designated by the TP under 20-50 or the 40-60
test?
The Applicable Income Limitation applies:
The unit will continue to be treated as a low-income unit if the income of the
occupants of a low-income unit increases to not more than 140% of the income
limitation applicable to the unit.
If the income of the occupants increases above 140% of the applicable income
limitation, the unit will no longer qualify as a low-income unit if any residential
rental unit of comparable size or smaller in the building is occupied by a new
resident whose income exceeds the applicable income limitation. This is the "next
available unit rule".
AKA - if it's depreciable, it's includable in EB
Excludes:
1. cost of land
Reduced by:
1. amount of federal grants financing construction/rehab costs
What are the 2 things that a project must be in order to qualify as a "low-income
housing project"?
1. rent restricted and
2. satisfy one of the minimum set-aside tests of 42g
What are the 3 minimum set-aside tests?
, 3
1. 20-50 test: At least 20% of the residential units in the project must be both
rent-restricted and occupied by tenants whose GI is 50% or less of the area
median gross income (AMGI)
2. 40-60 test: At least 40% of the residential units in the project must be both
rent-restricted and occupied by tenants whose GI is 60% or less of AMGI
3. Average Income Test: 40% or more (25% if project located in certain high cost
housing areas) of the residential units in the project are rent-restricted and
occupied by tenants whose income does not exceed the imputed income
limitation designated by the taxpayer with respect to the respective unit
What is the rent restriction under the 20-50 test and 40-60 test?
Rent restriction is 30% of a tenant's imputed income limitation which is generally
based on the number of bedrooms in a unit
How does the 'next available unit rule' work for a TP who has elected the Average
Income Test?
A unit ceases to be a low-income unit if:
(i) the income of an occupant of a low-income unit increases above 140% of the
greater of (A) 60% AMGI, or (B) the imputed income limitation designated by the
TP with respect to that unit (AKA the Applicable Imputed Income Limitation), and
(ii) any other residential rental unit in the building that is of comparable size or
smaller than that unit is occupied by a new tenant whose income exceeds the
applicable imputed income limitation
Under the next available unit rule for TP's who elected the average income test,
how is the applicable imputed income limitation determined?
