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: