Minnesota Housing moves forward with income averaging
In January 2019, Minnesota Housing will move forward with an income averaging option in the Housing Tax Credit (HTC) program. Income averaging allows Low Income Housing Tax Credit (LIHTC) owners to elect to serve households with incomes of up to 80% of area median income (AMI) and have these household qualify as LIHTC units, so long as the average income/rent limit in the project remains at 60% or less of AMI.
Depending on project details, income averaging will be available for tax credit developments. Income averaging will also be incorporated into the 2019 Round 2 HTC process and the 2019/2020 HTC Request for Proposal (RFP) process.
Novogradac graphic visualizing income averaging
Owners who elect income averaging must also commit to at least 40% of the units in the project have an average income level of no more than 60% of AMI and the rents for these units must be equal to 30% of the qualifying income level.
Minnesota Housing will issue guidance around eligibility, process, and the information you will need to submit to take advantage of income averaging. Sign up for Minnesota Housing’s eNews to ensure you receive that update.
For more resources on income averaging, including answers to frequently asked questions, check out information from the National Council of State Housing Agencies as well as Novogradac and the National Housing Law Project.