If you’ve been in the affordable property management field for a while, you’ve probably noticed that some eligibility criteria have changed over time. One significant example is that most federal housing programs now have student eligibility restrictions in place, making it more difficult for student qualification at affordable properties. On the whole, however, there are exceptions written into the regulations to allow for non-traditional student household eligibility. Of course, this makes qualifying them for individual programs more difficult than before. It also presents an even bigger challenge at blended properties, where multiple sets of student eligibility criteria are in place. How should this be handled?
First off, we need to understand each program’s requirements for student eligibility. The LIHTC program has had student eligibility requirements in place from its inception in 1986. It restricts households consisting entirely of full-time students from program eligibility unless they meet at least one of five exceptions. There are also other parameters that must be taken into consideration, such as how the IRS defines full-time students and how school-aged children are to be treated.
The HUD program requirements for student eligibility are much different. They take into consideration part-time students as well as full-time students on an individual basis for program eligibility. Its exceptions are completely different from those dictated by Section 42 for LIHTC; they center around students who are under the age of 24, which is not a factor for LIHTC. On top of that, we now have student eligibility restrictions for the HOME program as well.
When these programs are managed in a blended capacity you are in effect dealing with apples and oranges (and possibly bananas!) and must make eligibility decisions based on a “both/and” protocol as opposed to “either/or” — the traditional approach, whereby we try to choose whichever regulation is the most restrictive. This involves taking an inventory of household characteristics as prescribed by each program and then following a multi-step process by which student eligibility is determined. If this sounds confusing, it’s because it is and can easily lead to missteps that create noncompliance.
If you are interested in learning more about how to properly qualify student households for program eligibility, I encourage you to attend the next offering in our Blended Site Challenges Webinar Series will focus on Student Eligibility at Blended Sites and will be presented on Thursday, October 15, 2015. Please join me as we examine this issue in more depth and cover all that you need to know in order to make successful student eligibility determinations.