The Affordable Housing Compliance Glossary

A LIHTC development pattern where an existing property is purchased and rehabilitated. Has specific compliance implications including credit eligibility for existing tenants.

A required marketing plan describing how an affordable housing property will attract applicants from all racial, ethnic, and disability groups in its market area. Required for HUD-subsidized and LIHTC properties.

The state housing finance agency responsible for allocating tax credits, conducting compliance monitoring, and enforcing program requirements within the state.

Area Median Income. The midpoint income for a geographic area, published annually by HUD. Affordable housing programs use percentages of AMI to determine income eligibility and rent limits.

The midpoint income for a geographic area, published annually by HUD. Affordable housing programs use percentages of AMI to determine income eligibility and rent limits.

The yearly process of verifying tenant income, assets, and household composition to confirm continued eligibility for an affordable housing program.

The transfer or sale of an asset for less than fair market value. Affordable housing programs typically apply a two-year lookback rule, imputing the difference as an asset.

A Section 42 rule allowing a property to continue receiving credits on a unit occupied by a tenant whose income has exceeded the program limit, provided no comparable or smaller units are leased to non-qualified tenants.

A LIHTC set-aside option allowing income limits up to 80% AMI with an average across the property of 60% AMI or less. Provides flexibility but complicates compliance tracking.

Building Identification Number. A unique number assigned to each building in a LIHTC project for compliance tracking and reporting.

A unique number assigned to each building in a LIHTC project for compliance tracking and reporting.

A general term for affordable units offered at rents below market rate, often used in inclusionary zoning programs.

Tax-exempt bonds used to finance affordable housing development. Bond-financed properties have specific occupancy and income restrictions throughout the bond term.

Tax-exempt bonds used to finance affordable housing development. Bond-financed properties have specific occupancy and income restrictions throughout the bond term.

A LIHTC mechanism allowing credits to be allocated before the building is placed in service, subject to specific requirements being met within designated timeframes.

A unit similar in size, amenities, and bedroom count to a target unit, used in determining whether the Available Unit Rule applies.

The 15-year initial period during which a LIHTC property must comply with Section 42 requirements to avoid recapture of tax credits.

A reduction in rent or fees provided to a tenant. Affordable housing programs treat concessions in specific ways for rent calculation and compliance purposes.

The 10-year period during which a LIHTC property claims tax credits annually. Begins when the building is placed in service.

A practice of holding a unit for a qualified tenant who is delayed in moving in. Has specific compliance implications for vacancy tracking and credit eligibility.

Compensation to the LIHTC project developer, subject to state agency limits and inclusion in eligible basis calculations.

The involuntary relocation of existing tenants from a property. Various programs require displacement plans and protections.

The date a certification, lease, or rent change takes effect. Critical for compliance timing and TRACS submissions.

Enterprise Income Verification. HUD's system for verifying tenant income against federal records. EIV use is mandatory for HUD multifamily properties.

HUD's system for verifying tenant income against federal records. EIV use is mandatory for HUD multifamily properties.

The portion of a LIHTC project cost that qualifies for tax credit calculation. Excludes land and certain other costs.

An additional period beyond the initial 15-year compliance period during which a LIHTC property must continue operating as affordable housing. Total minimum is typically 30 years.

Federal law prohibiting discrimination in housing on the basis of race, color, national origin, religion, sex, familial status, or disability.

The 40th percentile rent for an area, published annually by HUD. Used to set payment standards in voucher programs and rent ceilings in some other programs.

The 40th percentile rent for an area, published annually by HUD. Used to set payment standards in voucher programs and rent ceilings in some other programs.

Adjustments to income limits based on household size, applied to determine eligibility for affordable housing programs.

The proportion of credits available in the first year of the credit period, based on the date units were placed in service. Calculated using specific Section 42 methodology.

The IRS form on which state housing agencies report LIHTC noncompliance. A Form 8823 filing has significant consequences for property owners.

A Section 42 requirement that LIHTC units be available to the general public, with limited exceptions for permissible occupancy restrictions.

A LIHTC requirement that tenants can only be evicted for good cause. Must be referenced in lease language for LIHTC properties.

The total rent paid by a tenant, including tenant-paid rent and any tenant-paid utilities. Used for rent limit compliance calculations.

A provision protecting affordable housing properties from negative impacts of income limit decreases. Specific rules vary by program.

The HOME Investment Partnerships Program, a federal block grant providing affordable housing funding to states and localities. Properties have specific compliance requirements during a period of affordability.

The Housing Opportunity Through Modernization Act of 2016. Federal legislation overhauling income, asset, and recertification rules for HUD-assisted housing. Full compliance required for HUD multifamily by January 1, 2027.

Physical condition standards previously used to inspect HUD-assisted housing. Largely replaced by NSPIRE.

Income calculated by applying a prescribed rate to total asset value, used when assets exceed certain thresholds and produce minimal actual income.

See Average Income Test.

Maximum allowed incomes for tenant eligibility in affordable housing programs, calculated as percentages of AMI and published annually by HUD.

A recertification triggered between annual recerts by specific events such as significant income changes or household composition changes. Triggers and rules vary by program.

Low-Income Housing Tax Credit. A federal tax credit program incentivizing affordable housing development. Properties operate under Section 42 of the Internal Revenue Code.

A person residing with a tenant to provide necessary supportive services. Live-in aides do not count toward household size or income for affordable housing programs.

A LIHTC violation serious enough to affect credit eligibility. Typically reported on Form 8823 and may result in credit recapture.

A property containing both affordable and market-rate units. Compliance is required for the affordable units only.

The initial income verification documenting a tenant's eligibility at the time of move-in. Establishes the household's income for compliance purposes.

A condition where a LIHTC unit is occupied by a non-qualified tenant and no comparable unit is available for a qualified tenant. Triggers compliance concerns under the Available Unit Rule.

Total household assets used to determine asset-related income. Under HOTMA, the self-certification threshold (indexed annually; $52,787 for 2026) determines verification requirements.

The National Standards for the Physical Inspection of Real Estate. HUD's framework for inspecting physical conditions of subsidized housing.

An annual factor applied to rent adjustments in certain HUD contracts.

Allowable deductions from gross income for affordable housing eligibility, including elderly/disabled allowance, dependent allowance, medical expenses, and others. Specific rules vary by program.

Project-Based Rental Assistance. A HUD program providing rental subsidies tied to specific properties rather than to individual tenants.

A HUD program providing rental subsidies tied to specific properties rather than to individual tenants.

Public Housing Authority. A government agency responsible for administering federal housing programs, including public housing and Housing Choice Vouchers.

A government agency responsible for administering federal housing programs, including public housing and Housing Choice Vouchers.

The date a LIHTC building is ready and available for its intended use. Triggers the start of the credit period for first-year fraction purposes.

See General Public Use Rule.

A state agency's plan describing how LIHTC credits will be allocated, including selection criteria and compliance monitoring procedures.

The portion of eligible basis attributable to LIHTC-qualified units, used to calculate the annual tax credit amount.

A census tract where at least 50% of households have incomes below 60% of AMI or where the poverty rate is at least 25%. LIHTC properties in QCTs may qualify for increased credits.

Rental Assistance Demonstration. A HUD program converting public housing and other subsidized properties to long-term project-based rental assistance contracts.

A HUD program converting public housing and other subsidized properties to long-term project-based rental assistance contracts.

HUD's Real Estate Assessment Center, responsible for inspections and assessments of HUD-subsidized properties.

The repayment of previously claimed tax credits triggered by noncompliance. Severe consequence for LIHTC owners.

The process of verifying a tenant's continued eligibility for an affordable housing program through updated income, asset, and household composition information.

A provision giving nonprofit partners the right to purchase a LIHTC property at a defined price after the compliance period.

USDA's Rural Development program, including Section 515 multifamily housing financing for rural affordable housing properties.

Supportive Housing for the Elderly. HUD program providing housing and supportive services for very low-income seniors.

The section of the Internal Revenue Code governing the Low-Income Housing Tax Credit program.

Federal housing assistance covering both tenant-based vouchers (Housing Choice Voucher) and project-based rental assistance. Major program for low-income rental housing.

Supportive Housing for Persons with Disabilities. HUD program providing housing and supportive services for very low-income people with disabilities.

The portion of a LIHTC property's units that must be occupied by income-qualified tenants. Common set-asides include 20-50, 40-60, and 100% income averaging.

A simplified recertification process available under certain conditions, typically for fixed-income households.

A determination of whether a household member is a full-time student. LIHTC has specific restrictions on units occupied entirely by full-time students.

The form documenting a LIHTC tenant household's income, assets, and household composition for compliance verification.

The form documenting a LIHTC tenant household's income, assets, and household composition for compliance verification.

A required written plan describing a HUD multifamily property's procedures for selecting tenants. Must comply with Fair Housing and program requirements.

The portion of rent a HUD-subsidized tenant is required to pay, calculated based on income, allowances, and program rules.

Tenant Rental Assistance Certification System. HUD's electronic system for receiving tenant data and rental assistance payment requests from HUD multifamily owners.

The first tier of HUD income verification, including EIV. Under HOTMA, the verification hierarchy starts with UIV before moving to third-party or self-certification.

An estimated cost of utilities paid by tenants, used to calculate the rent a tenant can be charged. Updates annually based on prescribed methodologies.

A HUD-VA collaborative program providing housing vouchers and supportive services for homeless veterans.

Violence Against Women Act protections for tenants in federally-assisted housing experiencing domestic violence, dating violence, sexual assault, or stalking.

The structured approach to verifying tenant information, typically progressing from upfront verification to third-party verification to self-certification. Strictly defined under HOTMA.

A documented plan to address material noncompliance findings, typically involving timeline, remediation steps, and responsible parties.