The Trainer

DETERMINING ELIGIBILITY FOR SECTION 8/LIHTC SITES

Our Compliance article in this Special Issue has looked at a unique aspect of Section 8: managing a project-based Section 8 site that also receives low-income housing tax credits (LIHTCs). To comply with Section 8 rules and not risk the owners' and investors' tax credits, you must follow both HUD and IRS rules. To test your understanding of the rules we discussed in “How to Determine Applicants' Eligibility for Section 8/LIHTC Site,” our guest trainer for this issue, Liz Bramlet, has created the following quiz.

TRAINER'S QUIZ

INSTRUCTIONS: Each of the questions below has only one correct answer. On a separate sheet of paper, write down the number of each question, followed by the answer you have chosen—for example, (1) b, (2) a, and so on. The correct answers (with explanations) follow the quiz. Good luck!

QUESTION #1

Charles is a property manager with years of experience managing LIHTC sites. But he's new to managing sites with project-based Section 8 rental assistance, and must learn how to determine whether an applicant is qualified to receive Section 8 assistance at his sites. How can Charles determine the income limit that applies to his different Section 8 sites?

1. Charles may elect to either use the low-income limit or very low-income limit to determine applicants' eligibility for his Section 8 sites.

2. No matter the site, Charles must always use the Section 8 very low-income limit to determine applicants' eligibility for his Section 8 sites.

3. Charles must know the effective date of the original HAP contract that provided Section 8 rental assistance for the residents at his sites.

QUESTION #2

Francine is the compliance manager for a nonprofit organization that uses the LIHTC program to refinance Section 8 sites. She's instructing the site manager for a Section 202/8 site on how to determine applicants' eligibility for units covered by the LIHTC program. How can Francine determine the LIHTC income limit that will apply to this Section 202/8 site?

1. Francine should tell the manager that an owner always uses the same income limit for the LIHTC program that he uses for the Section 8 program.

2. Francine should instruct the manager that because the “LI” in the LIHTC program stands for low income, the owner always uses the low-income limit to determine whether a household is eligible for the LIHTC program.

3. Francine must know the minimum set-aside the owner committed to for the LIHTC program for the site.

QUESTION #3

Franklin has taken a job with a developer who's specializing in refinancing Section 8 sites using low-income housing tax credits. How can Franklin determine how many residents can receive Section 8 assistance and how many units may generate a low-income housing tax credit?

1. Franklin can assume that in every building, every unit occupied by a resident receiving Section 8 assistance can also generate a low-income housing tax credit.

2. Franklin must know how many units receive Section 8 assistance under the site's HAP contract, and how many units are covered by the tax credit allocation for each building included in the site.

3. Franklin can assume that every unit in every building can generate a low-income housing tax credit.

QUESTION #4

Genevieve is new to managing mixed-income LIHTC buildings. One of her buildings has 100 units and a credit allocation covering 60 percent of the building. How can Genevieve ensure that the building will produce the tax credit the owner anticipates?

1. As long as 60 of the units in the building are occupied by LIHTC-eligible residents, the building will produce the anticipated tax credits.

2. Genevieve must ensure that 60 percent of the units, comprising at least 60 percent of the building's floor space, are occupied by LIHTC-eligible residents.

3. As long as the site meets the requirements of its minimum set-aside, the building will produce its anticipated tax credit.

QUESTION #5

Geraldo manages a Section 8/LIHTC site near a community college. Because of its location, the site attracts many applicants who attend school. For a Section 8/LIHTC unit, Geraldo must ensure that the applicant meets which student rule to qualify for occupancy?

1. An applicant must meet the requirements of both the Section 8 student rule and the LIHTC full-time student rule.

2. As long as an applicant meets the requirements of the Section 8 student rule, he qualifies to occupy a Section 8/LIHTC unit.

3. As long as an applicant meets the requirements of the LIHTC full-time student rule, he qualifies to occupy a Section 8/LIHTC unit.

QUESTION #6

Marika is processing an application for a Section 8/LIHTC unit at her site. For an applicant to qualify for this unit:

1. He must have an annual income that is not more than the greater of the Section 8 income limit or the LIHTC income limit.

2. He must have an annual income that is not more than the lesser of the Section 8 income limit or the LIHTC income limit and meet the requirements of either the Section 8 student rule or the LIHTC full-time student rule.

3. He must have an annual income that is not more than the lesser of the Section 8 income limit or the LIHTC income limit and meet the requirements of both the Section 8 student rule and the LIHTC full-time student rule.

QUESTION #7

Mario is a Section 8 resident at an LIHTC site. He's single and attends school on a full-time basis with an annual income of $24,500. The owner committed to the 40% @ 60% minimum set-aside. The 60 percent of AMI limit for one person is $24,000. Mario doesn't receive welfare, isn't in a job-training program, and was never a foster child. What can you determine about Mario's eligibility for his Section 8/LIHTC unit?

1. He doesn't meet the requirements of the LIHTC student rule, and his income exceeds the tax credit income limit.

2. He meets the requirements of the LIHTC student rule, but his income exceeds the tax credit income limit.

3. He doesn't meet the requirements of the LIHTC student rule, but his income is below the tax credit income limit.