Understanding Qualified Household Income and Rent Limits in Affordable Housing

AAHA 5/22/25 The Basics

The Basics What is a Qualified Household? Income Qualified Gross Rent must be within the applicable maximum rent limits Student Status

What should you know about your Project? Funding Program Did the Project receive Housing Credits, HOME funding, Housing Trust Fund, or a combination of 2 or 3 What is my Income and Rent Set-Aside? 100% at 60% The Basics 20% at 50% and the remaining 80% at 60% - project 40% at 50% and the remaining 60% at 60% - building 100% at 50% 100% at 50% for rent, but income is 40% at 50% and 60% at 60% 100% at 50% for rent, but income is 100% at 60%

Does my Project have Tenant Services? How often are they offered? Can I change them? Do they end? What Amenities does my Project provide? The Basics

Income must be verified from the source You can use the following: Employment Verification Pay-Stubs 4-6 within 120 days of the Effective Date Award Letters Certification of Zero Income Under $5,000 Asset Certification Bank Statements The Basics Income/Asset Qualification (pre-HOTMA regulations)

The Basics Student Status Housing Credit and HOME have two different Student Rules Depending on the funding the Project received, the Project must comply with one of the two rules or both

The Basics 1 2 3 Housing Credit will be inspected once every 3 years during the Compliance Period HOME will be inspected annually throughout the HOME Affordability Period On-site Inspections of the Project will be at least once a year Housing Trust Fund will be inspected once every 3 years during the Housing Trust Fund Affordability Period

The Basics How many files and units are inspected Whichever is less of 20% of the units or Minimum Sample Size Chart are inspected Whichever is less of 20% of the files or the Minimum Sample Size Chart are reviewed

The Basics 01 02 03 04 THE HOUSEHOLD FILES WILL BE SENT TO AHFA FOR REVIEW. MAKE SURE TO SEND WHAT IS LISTED ON THE CHECKLIST MAKE SURE TO SEND THE REQUESTED FILES AND INFORMATION BY THE DUE DATE MAKE SURE AHFA DMS HAS BEEN UPDATED THROUGH THE REQUIRED TIMEFRAME

The Basics By the 15thof the month, AHFA DMS must be updated with all tenant events for the prior month. Example: Audit Day is 5/5/25 AHFA DMS must be updated through 3/31/25 Audit Day is 5/25/25 AHFA DMS must be updated through 4/30/25

The Basics File Inspection Checklist The following will be on the checklist: The application for the household Current Utility Allowance(s) Rent Roll Rent Amounts for each bedroom size Income and Rent Set-Aside Report List of households that receive rental assistance List of households that receive Owner Rental Assistance List of Supportive Housing Units List of Units who certify Disabled/Homeless Affirmative Marketing Plan Waiting List

Move-in Lease Tenant Income Certification Income Certification(s) and Verification(s) Asset Verification(s) The Basics File inspection Checklist Student Certification(s) Housing Credit HOME HOME Addendum Bond Eligibility Certification HTF Addendum

The Basics File Inspection Checklist Recertification Tenant Income Certification Student Certification(s) Housing Credit HOME Post Year-15 **Income Certification(s) and Verification(s)** **Asset Verification(s)**

The Basics Housing credit Extended Use Period This is the term commencing at the beginning of the Compliance Period and ending 15 years after the close of the Compliance Period plus additional term specified on the Land Use Restrictive Covenant (LURC). Compliance Period Means the 15-year period commencing the 1sttaxable year of the Credit Period of the Project.

The Basics Housing credit Post Year-15 Compliance Period This is the 15-year period after the Compliance Period plus any additional years.

Rent Increase do not have to be approved by AHFA. The following are the components of Gross Rent: The Basics Housing credit Tenant Paid Rent Utility Allowance Make sure to check the following to determine the Housing Credit Income and Rent set-aside requirement: Housing Credit LURC Project Application

The Basics - HOME The HOME Affordability Period is 20 years. It begins when the HOME Loan closed. HOME funded properties are required to do a full recertification in years 6, 12, and 18 of the HOME Affordability Period Example: HOME Loan Closed 5/23/2024 Year 6 would be 2030 Year 12 would be 2036 Year 18 would be 2042

Submit HOME Project rent increases following the guidelines of Section 6.23 of AHFA s compliance manual. The following are the components of Gross Rent (New): Tenant Paid Rent Utility Allowance The Basics - HOME The gross rent must be at or below the current HOME Rent limits. AHFA will post the HOME income and rent limits each year once they are in affect.

Check the following to determine the Income and Rent Set-Aside requirement for your project: HOME LURC Project Application The Basics - HOME The set-aside MUST be followed throughout the HOME Affordability Period. After the completion of the HOME Affordability Period, you must review the Housing Credit LURC to determine the income and rent set-aside requirement for the remainder to the Extended Use Period.

The Basics Housing Trust Fund Housing Trust Fund (HTF) funded properties have a 30-year Affordability Period. An on-site inspection will occur once every three years. The Project must have a HTF Affirmative Marketing Plan. Tenant Paid Rent Utility Allowance Components of Gross Rent are the following:

The Projects units must be occupied by ELI- qualified households. The minimum set-aside chosen by the Ownership Entity on the application will determine the household s income percentage. The Basics Housing Trust Fund AHFA also provides the HTF income and rent limits on its website. HTF rent increase must be approved by AHFA

Full Recertifications are every 6thyear of the HTF Affordability Period. Example: HTF Loan Closing Date 5/1/2024 Year 6 = Year 12 = Year 18 = Year 24 = Year 30 = Self-Certifications are acceptable in the in-between years. 2030 2036 2042 2048 2054 The Basics Housing Trust Fund

This is the day the household moves into the unit. If the Project is 100% low-income then the effective date will stay with the household while they live at the Project, no matter if the household transfers to a different unit at the Project The Basics Effective Date If the Project is NOT 100% then it is based on the move-in date. The household is allowed to transfer within the same building and the effective date will remain the same, but if they transfer to another building, then you must move them out of the current unit and re-qualify them in the new unit.

The Basics Supportive Documentation Supportive certification(s) or verification(s) must be done within 120 days before the effective date

All regular sources of income, including assets valued at $5,000 or more, must be verified by a 3rdparty for Housing Credit Projects* The Basics Supportive Documentation All regular sources of income, including assets no matter the amount, must be verified by a 3rdparty for HOME Projects*

The Basics Supportive Documentation Verifications must be received prior to the completion of the Tenant Income Certification

The Basics Supportive Documentation AHFA provides addendums, certifications, verifications, and more in the Compliance section of the AHFA website, You must use these certifications. www.ahfa.com www.ahfa.com. If your company has different certifications, then they must be sent to AHFA for approval

AHFA puts the current set of income and rent limits for the following programs in the compliance section of the AHFA website: HOME HTF The Basics Income & Rent Limits Non-Metropolitan If the Project has active HOME funds, you cannot use these income and rent limits If the Project has active Multifamily Bond financing, you cannot use these income and rent limits What is missing? Housing Credit

The Basics Income & Rent Limits Housing Credit AHFA provides a link to the HUD Multifamily Tax Subsidy Limits and a link to the Novogradac Rent & Income Limit Calculator

The Basics Utility Allowance A UTILITY ALLOWANCE IS AN ALLOWANCE FOR THE COST OF ANY UTILITIES PAID DIRECTLY BY THE HOUSEHOLD AND IS A COMPONENT OF GROSS RENT DO NOT INCLUDE TELEPHONE, INTERNET, AND CABLE THE UTILITY ALLOWANCE MUST BE UPDATED ANNUALLY

The Basics Utility Allowance The following are acceptable forms of obtaining a utility allowance: Rural Development if the building or household receives Rural Development assistance HUD approved utility allowance buildings monitored by HUD Housing Authority If the household receives section 8 rental assistance, then you must provide the utility allowance from the housing authority that provides the rental assistance If the housing authority has jurisdiction over the area the Project is located

The Basics Utility Allowance An estimate received from the local utility provider Must be on the utility provider letterhead and have estimates for each utility paid by the household HUD Utility Schedule Model Must be approved by AHFA Energy Consumption Model Must be approved by AHFA

The Basics Set Aside Requirements Each Project can be different Check the application for the Project Check the LURC for the Project if more than one, then use the most restrictive AHFA created a Set-Aside Report in the Compliance Section of the AHFA website If the Project does not have a report that can monitor the set-aside requirement, then you must use the AHFA Set-Aside Report

The Basics Student Certification AHFA provides the student certifications in the Compliance section of the AHFA website. Student Verification (for educational institution) Housing Credit Student Self-Certification HOME Student Self-Certification Post Year-15 Student Self-Certification

The Basics Physical Inspection National Standards for the Physical Inspection of Real Estate (NSPIRE) Inspectable areas Inside Unit Outside

The Basics Physical Inspection QAP Point Deduction Housing Credit Qualified Allocation Plan HOME Action Plan Make sure to review these documents so that you know what type of findings could result in a point deduction for the Project

Contact Us mfcompliance@ahfa.com mfcompliance@ahfa.com 334-244-9200 800-325-2432 7460 Halcyon Pointe Drive, Montgomery, AL 36117