The proposed QAP revision would enable project owners to elect the Income Averaging Set Aside until no later than the date of the execution of the project’s IRS Form 8609 by CDA and the project owner in accordance with the requirements of Section E.8 of the QAP. Any project which has already executed a Low-Income Housing Tax Credit Covenant for LIHTC and wishes to amend the Covenant to incorporate the Income Averaging Set Aside prior to execution of IRS Form 8609 would need to receive approval from CD. Any project which has already executed IRS Form 8609 would not be eligible to elect the Income Averaging Set Aside.
It is the goal of the Department to permit project owners to elect the Income Averaging Set Aside until the date of issuance of IRS Form 8609 regardless of the status or stage of the project (i.e. underwriting review, construction, lease-up, etc.), so long as the election does not affect the eligibility of the project from a scoring perspective. As outlined in the Multifamily Rental Financing Program Guide (the “Guide”), any project that involves the use of the Multifamily Bond Program (MBP), Rental Housing Works (RHW) or FHA Risk Sharing must meet minimum scoring criteria outlined in Section 4: Competitive Scoring Criteria (page 44) of the Guide. Additionally, any project which received an award of competitive 9% LIHTC or Rental Housing Financing Program (RHFP) will be required to maintain the total score originally awarded in the applicable Competitive Funding Round.
As highlighted in Section A.3 of the draft QAP, the proposed changes implement the Income Averaging Set Aside, thereby creating a third Set Aside as follows:
“At least 40% of the housing units in the project for households with incomes at or below 80% of the area median gross income so long as the average gross income for all households in the project does not exceed 60% of the area median gross income (the “Income Averaging Set Aside”).”
Interested parties may submit comments to email@example.com by Friday, July 6, 2018.