IRSFinal Rule
Section 42, Low-Income Housing Credit Average Income Test Procedures
HousingFinance & Banking
Ad Space (leaderboard)
Summary
This IRS rule clarifies how affordable housing developments can prove they serve low-income residents by testing average tenant income levels. The regulation helps ensure that tax credit programs actually benefit people who need affordable housing the most.
Key Points
- 1Establishes clear procedures for measuring whether residents of federally-subsidized housing developments have incomes low enough to qualify as 'low-income'
- 2Affects housing developers and owners who receive federal tax credits for building or maintaining affordable apartments
- 3Requires developers to conduct income tests on their tenant populations to maintain compliance with federal housing requirements
- 4Helps prevent fraud and ensures tax benefits intended for poor and working families actually reach those populations
- 5Creates standardized testing methods so housing authorities and the IRS can consistently verify that affordable housing serves its intended purpose
Key Dates
Published
September 30, 2025
This summary is for informational purposes only. It may not capture all nuances of the regulation. Always refer to the official text for authoritative information.
The Digest Network
Ad Space (rectangle)
Related Regulations
HUDHousing
FR-6524-P-01 Housing and Community Development Act of 1980: Verification of Eligible Status
HUDHousing
FR-6085-N-05 Section 3 Project Threshold Updates for Creating Economic Opportunities for Low- and Very Low-Income Persons and Eligible Businesses
HUDHousing