​​ CHFA eNews: Multifamily
chfa enews - multifamily loan compliance 
March 16, 2015

HUD 2015 Incom​​​e Limits and Maximum Rents Released

The US Department of Housing and Urban Development (HUD) released income limits for 2015 on March 6, 2015. Income and rent limits for Colorado are now available on CHFA’s website.

IRS Revenue Ruling 94-57 allows LIHTC project owners to rely on the previous year’s income limits and maximum rents until 45 days after HUD has released new income limits. CHFA applies the same window to developments financed with loans through CHFA. The new income and rent limits must be implemented no later than April 20, 2015.

Exceptions for LIHTC projects: Since 2008, the IRS allows some LIHTC projects to use higher HERA limits and to be “held harmless” from decreases in limits. To identify the correct limits for your LIHTC project, it is essential to know its placed in service (PIS) date.
  • In 2015, HERA limits are still in place in many counties. To apply HERA limits, a project must have PIS as of December 31, 2008. Because this IRS rule is implemented on a project basis, in some cases projects in the same county will use different limits.

  • Remember, once your LIHTC project is placed in service, it is not subject to any decrease in income limits. To be “held harmless,” a LIHTC project must have PIS prior to the implementation date of the new limits. This year, LIHTC projects whose counties experienced a decrease in limits AND PIS before April 20,2015 may continue to apply the limits they used in 2014.

  • Note: HERA and hold harmless limits do not apply to properties that were not financed with LIHTC (e.g., properties with only HUD or CHFA loans).
Attention LIHTC and CHFA loan projects: Through 2014, CHFA’s income and rent tables used the HUD Section 8 income limits for households at 30 percent and 80 percent AMI. For 2015, the FY 2014 Consolidated Appropriations Act changed the way in which HUD calculates some Section 8 limits. Consequently, CHFA is no longer using the HUD Section 8 limits in CHFA’s income and rent tables. Instead, the 2015 limits for all households are calculated based on HUD’s Multifamily Tax Subsidy Income Limits.

For some Colorado counties, this results in a decrease in some limits and rents in 2015. As always, existing LIHTC projects located in counties with decreased limits may choose to use either the limits they used in the prior year or the new limits. New projects that place in service on or after the implementation date of April 20, 2015, must use the 2015 limits. Projects that do not have LIHTC must use the 2015 limits.

Utility Allowance Reminder: Gross rents (tenant rent + utility allowance + non-optional fees) may not exceed the applicable maximum rent. As a reminder, updated utility allowances must be implemented by the first day immediately following the 90-day period that begins with the new utility allowance schedule’s effective date. For more information, see CHFA’s Utility Allowance Memo.

If you have any questions, please contact your Program Compliance Officer or visit our website at the link included above.


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