Preparation For The Hccp Exam

What are the testable subject’s areas covered in the HCCP Exam? Tenant Qualification and Leasing A. Eligibility/selection criteria for the project B. Rental application and recertification update forms C. Acceptable screening criteria D. Determination of household size E. Income definition and verification F. Assets: definition, valuation and verification G. Calculating annual income H. Eligibility of student households I. LIHTC income limits J. Utility allowances K. Tenant transfers L. Tenant certification of income M. Lease documents and lease requirements

Housing Credit Accounting and Compliance A. Definitions of basic housing credit terms B. Purpose and issuance of IRS Low Income Housing Tax Credit forms C. Claiming housing credits D. Calculation of qualified basis

E. Occupancy requirements of housing credit projects (habitability, non-transiency of tenants) F. Placed-in-service dates, the initial credit period, and the project compliance period G. Owner's compliance requirements (including special financing requirements, special set-asides, and Extended Land Use Restriction Agreements) H. Treatment of common area I. Difference in compliance requirements between 100%-eligible projects and mixed income projects J. Acquisition/rehabilitation properties K. Federally subsidized projects L. Projects financed by tax-exempt bonds M. State-approved project criteria N. Minimum set-aside selected for a project O. LIHTC rent requirements (including utility allowances and gross rent floor) P. Increases and decreases to qualified basis Q. The "140% rule", the next available unit rule, and the unit vacancy rule R. Changes in project ownership S. Record retention requirements T. Tracking and recording compliance by unit, building, and project U. Compliance documentation for the state monitoring agency and due diligence submission V. Required procedures and compliance documentation for owners, lenders, syndicators, partners, and property managers W. Audits and inspections by state monitoring agency and the IRS X. Actions to address non-compliance and prevention of non-compliance Y. Annual waiver of recertification

Federal and State Laws, Regulations and Programs A. Authority for the LIHTC program (including legislative history, IRS Section 42, HUD Handbook 4350.3, IRS rulings and technical bulletins, and Treasury Regulations) B. Interaction between LIHTC and other federal laws and regulations (Fair Housing Laws, Americans with Disabilities Act, and Housing Quality Standards, Uniform Physical Standards) C. Interaction between LIHTC and state monitoring agency compliance regulations and policies D. Interaction between LIHTC and other federal programs (HOME Assistance Program, federal rent subsidy programs)

22) What topics should I review to help me prepare for the HCCP Exam?

Definitions 1. Tax Credit/Housing Credit 2. Project (Minimum) Set-Aside 3. Eligible Basis 4. Applicable Fraction 5. Qualified Basis 6. Credit Percentage (Applicable Percentage) 7. Federal Subsidy 8. Annual Amount of Credit 9. Credit Period 10. Compliance Period 11. Land Use Restriction Agreement

Forms Form 8586 Form 8609 Form 8609 Schedule A Form 8610 Form 8611 Form 8693 Form 8823

Program Rules and Regulations How Program Income Limits are Determined Household income limitations are determined based on the area's median gross income (AMGI) as determined by HUD. Each year, HUD adjusts the area's median household income based on a variety of factors such as the area economy and household growth. Income restrictions are determined on a Metropolitan Statistical Area (MSA) or county level, and are determined for a household of 4 people. Let's use the Columbus, Ohio MSA as an example to determine who can live in a project at the 60% income level. To get to the 60% level, we must start with the HUD-determined Very Low Income (50%) number for the area. Because HUD sometimes adjusts eligible incomes based on area incomes and their relation to area housing costs, it is not always accurate to work backwards from the AMGI. HUD VLI for a household of 4: $25,300 Multiply *1.2 to adjust to 60% *1.2 Maximum income for 4-person $30,360 household at 60% of AMGI AMGI $50,600

This figure is adjusted for household size as follows: Household Size

Adjustment

One-person household

70% (*0.7)

Columbus Maximum $21,252

Two-person household Three-person household Four-person household Five-person household Six-person household

80% (*0.8) 90% (*0.9) 100% (no adjustment) 108% (*1.08) 116% (*1.16)

$24,288 $27,324 $30,360 $32,789 $35,218

Maximum rents are based on tenants at maximum income paying no more than 30% of their income for housing. Maximum rents for unit type are set by the expected occupancy, regardless of the number of people who actually live in the unit. The following table illustrates:

Unit Type Studio One-Bedroom Two-Bedroom Three-Bedroom Four-Bedroom

Expected Occupancy 1.0 person 1.5 persons 3.0 persons 4.5 persons 6.0 persons

Maximum Income $21,252 $22,770 $27,354 $31,574 $35,218

Maximum Rent (Income/12)*.3 $531 $569 $683 $789 $880

It is important to note that adjusting the maximum incomes to expected occupancy totals requires additional calculation. To determine the maximum income for a one-bedroom unit with an expected occupancy of 1.5 persons (as in the chart above), one can either multiply the unadjusted four-person rate by 75% (*0.75) or add the one-person and two-person incomes and then divide by two to get the average. Likewise, to calculate the 4.5 person limit, one can either multiply the four-person limit by 104% (*1.04) or take the average of the four- and five-person totals. A household may live in an LIHTC unit if the household income is no greater than the maximum allowed for that size household. If a two-person household making the maximum for Columbus ($24,288) wished to live in a three-bedroom unit set at the maximum allowable rent ($789), it is allowable under program guidelines. Ultimately, it would be up to the property's management to determine whether they wish to accept a household paying 39.0% of their income for rent. However, given the program's guidelines, all households making less than the maximum for their household size will pay greater than 30% of their income for rent if rent is set at the maximum allowable. We surveyed several communities in the Midwest in 1993 to determine the percentage of rent paid by LIHTC renters. In our sample survey, 10.9% of all renters were paying over 50% of income toward rent, and 40.3% were paying over 40% of income toward rent. We have heard of other surveys that have found up to 25% of all LIHTC renters paying over 50% of income toward rent.

Establishing Occupancy Standards

Income Limits --How Calculated Rent Structure -- How Calculated Gross Rent Floor Maximum Tax Credit Rent Section 8 Assistance Payments

Maximum Tax Credit Rent/Net Rent Utility Allowance Rent Assisted Households Utility Allowance and Maximum LIHTC Rents Lease Terms Students Credit Period and Minimum Set-Aside Deadline Calculation of First Year’s Applicable Fraction Determining Eligibility/Section 8 Requirement Verification of Household Income Qualifying the Applicant How to Annualize Full – Time Income Calculating a Raise Calculating Overtime Net Income of a Business Social Security Income Welfare Assistance Military pay The $5,000 Rule Determining Cash Value Equity in Real Estate and Other Capital Investments Retirement Funds Divestiture of an Asset Recertification Waiver Unit Transfers Available Unit Rule Vacant Unit Rule Monitoring the Minimum Set-Aside

Federal Grants Tax Exempt Bonds HOME Funds Acquisition/Rehab Compliance Monitoring and Reporting File Reviews Unit Inspections Reporting Non-Compliance Correcting Non-Compliance Delegating Non-Compliance Monitoring Maintaining Tax Credit Files

Other Sections 2 & 3 – HUD 4350.3 Handbook §42 – Low Income Housing Tax Credit Statute

A list of questions: 1. Where can I get the required training and do you provide this kind of training? 2. If Rents are based on bedroom size, how come that we are considering the household size? (i.e pregnant woman etc.)