The Housing and Economic Recovery Act (HERA) of 2008 made changes to how income limits are calculated for the Low-Income Housing Tax Credit (LIHTC) and tax-exempt bond-financed properties. On March 19, 2009, the U.S. Department of Housing and Urban Development (HUD) issued Multifamily Tax Subsidy Projects (MTSP) limits. A MTSP is a property allocated LIHTC and/or financed through the tax-exempt bond program. These limits were issued by HUD in response to changes in the way income limits are calculated, as required in accordance with HERA. As part of the limits for use by MTSP properties, HUD issued a separate “HERA Special” income limit for counties where the HUD hold-harmless policy applied.
There were 20 counties in Kentucky identified by HUD as Impacted Areas that may use the “HERA Special” income limits, if applicable. The “HERA Special” income limits may be used by properties allocated LIHTC and/or financed through the tax-exempt bond program with at least one building placed-in-service (PIS) on or before December 31, 2008, and located in one of the Impacted Areas.
In addition, HERA provided for projects allocated LIHTC through the Kentucky Housing Corporation (KHC) allocation ceiling to utilize the greater of the applicable area median gross income limit standard or the national nonmetropolitan area median gross income limit. This provision does not apply to tax-exempt bond financed properties.
HERA has now made it necessary for KHC to provide three income and rent limit charts. The charts are broken down in the following three categories: 1) Sec 42 LIHTC properties (not tax-exempt bond financed); 2) Tax-exempt Bond Financed properties; and 3) “HERA Special” Income Limits. If your project is a Sec 42 LIHTC property, located in one of the 20 HUD Impacted Areas, and at least one building was PIS on or before December 31, 2008, you will need to compare the standard Sec 42 LIHTC Chart to the “HERA Special” Chart and use the greater of the income limits for your property.
For Example: You have a LIHTC property located in Caldwell County with at least one building PIS on or before December 31, 2008, a minimum set-aside (MSA) of 20/50, and a one person household, you will need to compare the Standard Sec 42 LIHTC one person 50 percent income limit ($17,950) and rent limit to the “HERA Special” one person 50 percent income limit ($16300). However, if the property was tax-exempt bond financed you would need to compare the Tax-exempt Bond Financed Chart limit ($15,950) to the “HERA Special” Chart limit ($16,300). The Sec 42 LIHTC property would use the $17,950 income limit and the tax-exempt bond financed property would use the $16,300 income limit.
If you need assistance in determining which chart you should use for your property, please contact the KHC employee listed at the bottom of this page.
For more information, contact:
Kentucky Housing Corporation | 1231 Louisville Rd., Frankfort,
KY 40601 502-564-7630; 800-633-8896 (KY only); TTY 711