The Average Income Resource Center provides information on the Average Income Test (AIT) minimum set-aside election The Average Income minimum set-aside election is an option for Housing Credit developments.
Specifically, rather than committing to either 40 percent of units limited to 60 percent of area median income (AMI) or 20 percent of units limited to 50 percent of AMI, developers would have a third option, allowing Credit-qualified units to serve households earning as much as 80 percent of AMI, so long as the average income limit in the property is 60 percent or less of AMI.Developers would have to commit to having at least 40 percent of the units in the property affordable to eligible households. The 80 percent of AMI standard is consistent with long-standing federal affordable housing policies, which define "low income" as households earning no more than 80 percent of AMI. Under the income averaging option, the higher rents that households with incomes in the 61-80 percent of AMI range could pay would have the potential to offset the lower rents for extremely low- and very low-income households living in the property, thereby allowing developments to maintain financial feasibility while providing a deeper level of affordability than is currently possible without other subsidies. Income averaging would thus preserve rigorous targeting to low-income households, while providing more flexibility and greater income-mixing potential.
To learn more about income-averaging, we recommend the following resources that have been prepared by the National Council of State Housing Agencies (NCSHA) and Novogradac and Company.