HUD Lifts Previous Cap on Voucher Rents for Certain LIHTC Units
By Caitlin Jones & A. J. Johnson
2 min read
THE U.S. Department on Housing and Urban Development (HUD) on 11/19/07 published a final rule in the Federal Register that lifts a previous limitation that restricted the HUD Section 8 project-based voucher rent to the low-income housing tax credit (LIHTC) rent for units assisted by vouchers and credits. The rule is effective 12/19/07.
The final rule repeals a limitation instituted in October 2005 that capped the project-based voucher (PBV) rent at the maximum LIHTC rent for voucher-assisted LIHTC units. As a result, the final regulation reinstates the rules in effect prior to October 2005, which permit situations where the voucher rents for a project receiving LIHTCs can be higher than the LIHTC rent limit, such as for projects in qualified census tracts (QCTs).
According to a recent news alert issued by the law firm Ballard Spahr, PBV rents for LIHTC units under the final rule will be calculated such to allow voucher rents for LIHTC units of up to 110% of the HUD Fair Market Rent (FMR), or a higher exception payment if approved by HUD, for LIHTC units inside or outside of QCTs. According to the memo, the only situation where the LIHTC rent cap will serve as the cap for voucher rents will be for units in projects located outside QCTs where the LIHTC rent limit is above the FMR or HUD-approved exception payment standard.
The final rule also reiterates that public housing agencies may not enter into assistance contracts until HUD or a HUD-approved independent entity conducts a mandatory subsidy layering review and determines that the assistance satisfies HUD requirements.
