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Blending HOME and LIHTC Requirements

In the LIHTC Program, the rent for each unit must be established so that tenant monthly housing costs, including a utility allowance, do not exceed the applicable LIHTC rent limit. Like the HOME program, maximum rents are based on AMI and unit size (as opposed to the actual income of the households occupying the unit). Unlike HOME, however, the LIHTC rent limits restrict only the tenant contribution, not the total rent paid for the unit, so Section 8 subsidies (including tenant-based housing choice vouchers and project-based Section 8) and other similar rental subsidies can raise the total rent above the limits.

When combining the two types of funding, both sets of rules apply. Qualified LIHTC units must not exceed LIHTC rent limits. HOME assisted units must meet high and low HOME rent requirements. If a unit is being counted under the property-specific LIHTC set-aside and the property-specific Low/High HOME requirement, the stricter rent limit applies. For example:

  • Low HOME rent units are subject to the lower of the low HOME rent or the LIHTC rent (usually the low HOME rent).
     
  • High HOME rent units are subject to the lower of the high HOME rent and the LIHTC rent (usually the LIHTC rent).

The chart below summarizes the rules for the two programs:

HOME PROGRAM
Image of a checkmark Low HOME rents may not exceed 30 percent of 50 percent of AMI, adjusted for unit size and tenant-paid utilities. Additionally, the Low HOME rent must never exceed the High HOME rent. At least 20 percent of HOME units in projects with 5 or more HOME-assisted units must have Low HOME rents. Those with fewer than 5 HOME-assisted units may charge up to the High HOME rent on all units.
Image of a checkmark High HOME rents apply to all other HOME-assisted units and are calculated as the lesser of the FMR or 30 percent of 65 percent AMI, adjusted for unit size and tenant-paid utilities.
Image of a checkmark Both High HOME and Low HOME rents are published by HUD, and both limit the total rent paid for the unit, including rental assistance (except that this limit does not apply when project-based rental assistance, such as project-based Section 8, is used in HOME rental units).
LIHTC PROGRAM
Image of a checkmark The tenant's contribution (including contribution toward rent and any utility allowance) cannot exceed the LIHTC rent limit for the unit. These limits are based on AMI and unit size, and must be adjusted for tenant-paid utilities.