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Guide for Completing Form 8823 - page 35 / 197





35 / 197

8. Persons permanently confined to a hospital or nursing home. The family decides if such persons are included when determining family size for income limits. If the family chooses to include the permanently confined person as a member of the household, the owner must include income received by the confined person in calculating family income.

Changes in Family Size

Changes in the size of an existing household after the initial tenant income certification must also be addressed.

Family Size Increases

The addition of new member(s) to an existing low-income household requires the income certification for the new member of the household, including third party verification. *The treatment will depend on whether the building is a mixed-use or 100% LIHC building.

Mixed-Use Projects

For mixed-use projects, the* new tenant’s income is added to the income disclosed on the existing household’s *most recent* tenant income certification.11 The household continues to be income-qualified, and the income of the new member is taken into consideration with the income of the existing household for purposes of the Available Unit Rule under IRC §42(g)(2)(D). See chapter 14.

Example 1: Additional Person Joins Household During the Year

Jim and his two children initially income qualified and moved into an LIHC unit on March 1, *2005. The project is a mixed-use project consisting of one building with 50 low-income units and 25 market rate units.* The household continued to qualify at the annual income recertification for *2006, 2007, and 2008.* Jim then met Jane, and they decided to marry in October *2008.* The new couple would like to live in the LIHC unit Jim occupies. Jane completes a tenant income certification.

The certification effective date continues to be March 1, *2005* and the next annual income recertification is due within 120 days before March 1, *2009.*

If the household’s income, when Jane’s income is added *to the existing household’s income as determined for the March 1, 2009 annual recertification,* exceeds 140 percent of the income limit (170 percent in deep rent skewed projects), then *the unit is an over- income unit and* the Available Unit Rule *is applicable.

11 Under IRC *§142(d)(3)(A) and* Treas. Reg. 1.42-5(c)(iii), owners must obtain an annual income certification from each low- income tenant *if the low-income building is part of a mixed-use low-income project.* Interim income recertifications are not *required* under IRC §42.


Revised October 2009

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