In finalizing a new income averaging rule for the Low-Income Housing Tax Credit last week, The U.S. Treasury Department may qualify more affordable housing developments.
The income-averaging rule provides for a more broad mix of income levels for residents in qualifying projects. Previously, projects that qualified for LIHTC credits had to designate either a minimum of 20% of a development’s units to residents earning 50% or less of the Area Median Income or 40% of the units to 60% of the AMI.
Under the revision, projects can qualify using an average of income levels instead of setting fixed limits as part of the total unit counts. Projects can now qualify if at least 40% of units meet an average of 60% of AMI, which will enable more low-income residents to stay in their units even if their incomes increase slightly.
The update also extends the deadlines for when some projects have to come online. Developments that had encountered delays due to construction difficulties and supply chain shortages may now be able to remain in the program rather than be disqualified for missed deadlines. (Source)