THE KEY TO UNDERSTANDING AFFORDABLE HOUSING
WHAT IS THE HOUSE TAX CREDIT PROGRAM?
In 1986, the federal government implemented the Housing Tax Credit Program, to shift the burden of providing for households with low to moderate incomes from the government to the private sector. In exchange for providing housing for low to moderate-income households, the private sector receives tax credits – dollar for dollar reductions in income taxes. The guidelines for the Housing Tax Credit Program are outlined in Section 42 of the Internal Revenue Code.
HOW DOES THE HOUSING TAX CREDIT PROGRAM DIFFER FROM OTHER RENTAL ASSISTANCE PROGRAMS, SUCH AS SECTION 8?
The Housing Tax Credit Program is a tax benefit granted to the owner for a particular rental apartment. The owner is required to conform to restrictions relating to maximum household income of renters and the amount of rent being charged on the unit. Although the Housing Tax Credit Program does not provide rental assistance directly, many property owners accept the Section 8 Subsidy Program for their residents.
HOW CAN A HOUSEHOLD QUALIFY TO LIVE AT OUR HOUSING TAX CREDIT PROPERTY?
To determine if a household is qualified to live at a Housing Tax Credit property, it must met certain acceptance criteria including credit, criminal background and income. All household members will be asked to disclose information relating to income, family size and financial assets. All income and assets are third party verified. To qualify, a household must meet the acceptance criteria and have an annual household income that is less than the Maximum Income Limit, as published annually by the Department of Housing and Urban Development.
HOW DOES THIS PROGRAM BENEFIT OUR RESIDENTS?
If a household meets the acceptance criteria and the annual income is below the Maximum Income Limit, the rent amount charged is lower than that of conventional market rate apartments of comparable size and features.
WHAT WOULD PREVENT A HOUSEHOLD FROM QUALIFYING?
- Inability to live in the apartment for more than six months
- If all adult members are or become full-time students at any time during the residency and do not meet the accepted exemptions
- Annual household income exceeds the Maximum Income Limit during the initial qualifications process
- One original member of the household must remain in the apartment. If all original members vacate at any given time, the new members must meet the initial qualifying criteria.
HOW DOES THE APPLICATION PROCESS WORK?
An “interview” is conducted and applications for all adult household members completed. Credit, criminal and landlord references are checked. If initial acceptance criteria is met, third part verification of income and assets follows. Upon completion of the verification process and calculation of annual household income is made the applicants are notified of their qualification status. If qualified and accepted as a resident, the household certified their income based on the verifications received.
WHAT IS INCLUDED IN THE INCOME CALCULATIONS?
- Monetary Gifts
- Child Support
- Social Security
- Income from Assets and Investments
IS THIS AN ANNUAL PROCESS?
Yes. Every year you are required by the Housing Tax Credit Code and the IRS to repeat the income certification process. However, you are allowed to exceed the Maximum Income Limits once initially qualified at move-in in most circumstances. Full time student status restrictions remain in place at all times (process may very).