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:
Columbus
Household Size Adjustment
Maximum
One-person household 70% (*0.7) $21,252
 Two-person household 80% (*0.8) $24,288
Three-person household 90% (*0.9) $27,324
Four-person household 100% (no adjustment) $30,360
Five-person household 108% (*1.08) $32,789
Six-person household 116% (*1.16) $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:

Maximum Rent
Unit Type Expected Occupancy Maximum Income (Income/12)*.3
Studio 1.0 person $21,252 $531
One-Bedroom 1.5 persons $22,770 $569
Two-Bedroom 3.0 persons $27,354 $683
Three-Bedroom 4.5 persons $31,574 $789
Four-Bedroom 6.0 persons $35,218 $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.)