Why is it called Section 42 Housing?
The Tax Credit Reform Act of 1986 created the Low Income Housing Tax Credit Program (LIHTC). The program regulations are under Section 42 of the Internal Revenue Code. The tax credit encourages developers to build affordable housing to meet the needs of the community. As a condition for receiving Housing Tax Credits, owners must keep the units affordable for a specified number of years. Affordable rents are defined and calculated based on Median Household Income figures published annually by the U.S. Department of Housing and Urban Development (HUD).
How do I determine if I am eligible for a Section 42 Tax Credit Unit?
You will be asked to complete an application that requests information regarding your household composition, income, and student status. These factors will determine your eligibility for this program.
Who determines the Maximum Qualifying Income Level?
Qualified income levels are determined by the local office of the Department of Housing and Urban Development (HUD) , based on two factors: 1) a percentage of the median household income for the county or metropolitan statistical area in which the development is located; and 2) the number of people in your household.
What is counted as income?
Your income level is based on the combined projected gross income, including income from assets, for the next 12 months of all household members 18 years of age and older.
What are assets?
Assets are those valuables, other than personal items, which must be considered when determining family income. Examples include interest from savings and checking, as well as potential income from IRAs, 401K, CDs, and real estate.
Do I have to verify my income every year?
Yes. You must recertify your income and family size before you are offered a new lease. This process starts about 90 days before your lease renewal date.
Can I add someone to my household after being approved?
The unit is being rented to you and those identified on the rental application. Any changes in household size or income must be reported in writing and may require that you reapply for eligibility.