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Guide for Completing Form 8823 - page 33 / 197

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conducted after July 30, 2008,6 where the project is a 100% LIHC project and the owner is not subject to the annual income recertification requirements, the state agency will always review the initial income certification.7*

Determining Income Limits (Area Median Gross Income)

  • *

    Years Prior to

2009*

To determine the appropriate household income limit figure, refer to the HUD-published table relating to “very low income,” which is an income level at or below 50 per cent of

the Area Median Gross Income (AMGI). HUD prepares tables and provides income figures for family sizes ranging from one to eight persons.

  • *

    Years

Subsequent to 2008*

If the owner elected the 40/60 minimum set-aside, then the published income figures for the 50 per cent of AMGI should be multiplied by 1.2.8 There should be no rounding of these figures, as HUD has already rounded *to the nearest $50* in the tables.

*Beginning with the release of AMGI tables for 20099, HUD is providing a separate table for IRC §§ 42 and 142(d) housing projects, which HUD now collectively refers to as “Multifamily Tax Subsidy Projects” (MTSP).

  • 1.

    The tables are in the same format as in prior years. The column down the left-hand side identifies the state and area within each state. From left to right, the columns identify the income limits based on household size (1 to 8 persons).

  • 2.

    The tables identify the income limits at the 50% and 60% AMGI levels needed to satisfy the minimum set-aside requirement. As a result, the instructions in Rev. Rul. 89-24 to compute 60% AMGI are no longer needed.

3. In those areas where the income limits did not decrease in 2007 and 2008 because of HUD’s hold harmless policy, the tables include a second set of income limits identified as “HERA Special 50%” and “HERA Special 60%.” These income limits are applicable if the owner relied on the income limits provided by HUD to determine the income limits applicable to the low-income project and determined whether households were income qualified based on those income limits (adjusted for family size) in either 2007 or 2008. I f the project was in service, or placed in service during 2007 or 2008, the owner relied on the income limits provided by HUD and the HERA special income limits should be used.*

6 *For reviews conducted before July 31, 2008, if the owner received a waiver of the annual income recertification requirements, the state agency reviewed the initial income certification. See Rev. Proc. 2004-38, section 5.07, 2004-2 C.B. 10, and Rev. Proc.94-64, Section 4.05, 1994-2 C.B. 797. If noncompliance with the tenant income certification requirements was sufficiently serious, consideration was given to revoking the waiver. Revocation was not required, but the Service would revoke the waiver at the state agency’s request.*

7

*See IRC §142(d)(3).*

8

Rev. Rul. 89-24, 1989-1 C.B. 24.

9 *Section 3009 of the Housing Assistance Tax Act (HATA) amended IRC §142(d)(2) to add a new subparagraph E. IRC

§142(d)(2) is cross referenced in IRC §42(g)(4) and is equally applicable to qualified low-income projects under IRC §42.*

4-2

Revised October 2009

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