Whether your property is 100% tax credit program units or mixed-income, unique program rules affect your property and must be understood to remain compliant. Up to now, we’ve focused on rules applied at the household level. In this course, you will learn about program rules applied on the unit, building, or project level. It is also important to understand how compliance is measured. This requires knowledge of the more complicated concepts of tax credit program compliance: minimum set-aside and applicable fraction.

Some rules apply to the eligibility of the specific tax credit units themselves. These rules can be categorized into six areas and cover issues like minimum lease terms, property standards, and availability of units for use by the general public. Units not meeting the eligibility rules may result in noncompliance, even if the household occupying the unit is qualified for the tax credit program.

In previous courses, you learned about certifications that must be performed to determine initial eligibility, as well as annual recertifications to show that each program-qualified household continues to be eligible. Adjusted certifications also are performed when a new member joins a qualified household. The process of completing required certifications is very important, and to avoid noncompliance, care must be taken to perform them correctly.

One unique tax credit program compliance rule is the available unit rule (AUR). This rule is invoked if a previously qualified household has an income increase above a predetermined threshold. If this happens, there are rules in place that, if followed, will keep the unit in compliance. As with all program rules, you must understand the available unit rule and how to apply it in a variety of situations.

Two additional unique compliance rules are the unit transfer and the unit vacancy rules. While the tax credit program allows for unit transfers, specific guidelines must be followed. Most important is knowing when a transfer is considered a swap, and when you need to re-qualify the household to maintain your property’s applicable fraction. You will also learn important definitions related to the unit vacancy rule and how to document reasonable attempts and unit availability.