Rural LIHTC Developments have Two Options when Calculating Income Limits
Nine percent low-income housing tax credit (LIHTC) properties located in a rural area as defined by the U.S. Department of Agriculture have two options when calculating income limits. These properties are able to use the greater of the applicable income limit for their county or the National Non-Metro Median income (NNMI) limit.
The NNMI limit is an important benchmark for LIHTC properties. The U.S. Department of Housing and Urban Development (HUD) typically publishes the NNMI limit in two places, in its Frequently Asked Questions (FAQs) and in its documentation system.
Per HUD’s Methodology for Determining Section 8 Income Limits, “HUD rounds income limits up to the nearest $50” when calculating the family size adjustment for Section 8 limits. However, HUD does not follow this convention when calculating the family size adjustment for the NNMI limit.
However, for 2022, when HUD released its income limits, it appeared to break its tradition of using a separate rounding convention for NNMI limits and released the following table in its FAQs that conformed the rounding of NNMI limits to the Section 8 rounding convention:
However, during the following weeks, HUD updated its FAQ to revert to the separate rounding convention:
If properties used the HUD website during this window or the Novogradac Rent & Income Limit Calculator©, they will need to re-run their limits to make sure they are in compliance with HUD’s updated calculation.