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HUD and LIHTC Student Tips for Compliance

Useful Tips for Student Requirements

As compliance consultants who review thousands of HUD and LIHTC files, we have put together some frequently asked questions regarding student requirements. We are hoping that the following FAQs will provide you with guidance with regard to student requirements.

Q. Do I count all of the income from a full-time student over 18 when calculating annual income?

A. If the student is employed but is not the head, co-head or spouse, and is a dependent of the household, you count only the first $480 of their wages for the entire 12-month period. Also, count all unearned income (Social Security benefits, TANF, unemployment, etc.) for any student. Verification of full-time student status is required to be maintained on file for both HUD and LIHTC programs.

Q. Is student financial assistance considered income for purposes of qualifying a household for a tax credit unit? If so, what parts do I count?

A. Only if the tax credit unit or resident is receiving some form of Section 8 rental assistance would you include student financial assistance in excess of tuition in fees as income.

Q. I have an applicant who is expecting a child, is 20 years old and is a part-time college student. Does she qualify for a HUD or LIHTC unit?

A. She does not qualify for HUD. She does not meet any of the exceptions of the HUD Student Rules. She is under the age of 24, she is a part-time college student and the unborn child cannot be considered a household member. HUD does not consider unborn children as a household members. She does, however, qualify for the LIHTC program because the unborn child would be considered a household member and she is a part-time student. A self-certification of pregnancy must be obtained for both programs. Also, note that a part-time student is always eligible for the LITHC program as long as student status verification is obtained.

Full-Time Student As the Only Household Member

Q. One of my residents has informed me that he has been enrolled as a full-time student and he is the only household member. Is my resident still eligible?

A. No. The resident is no longer eligible for the LIHTC program unless they qualify for any one of the following exceptions, which you must third-party verify:

  • enrolled in a job training program receiving assistance under the Workforce Investment Act (formerly JTPA) or other similar program funded by a state or local government agency.
  • receiving benefits under Title IV of the Social Security Act (e.g., TANF)
  • a single parent and the single parent is not a dependent of another individual, nor are their children dependents of another individual except another parent of such children.
  • married and eligible to file a joint return.

A student that was previously under the care of a state foster care program.

It is permissible for a unit to be occupied by a full-time student where there are other people in the household that qualify. However, when a unit becomes occupied entirely by full-time students (defined as individuals enrolled full time at an educational organization for at least five calendar months during the year that need not be consecutive), the unit becomes disqualified unless any of the exceptions above apply.

Q. An applicant for LIHTC graduated from high school on May 2. She was a full-time high school student from January 4 until May 2 and does not anticipate furthering her education. There are no other household members applying. Does this person qualify for a HUD or LIHTC unit?

A. She does qualify for HUD since high school is not considered an institution of higher education. She does not qualify for the LIHTC program. A full-time student does not qualify for LIHTC if he/she was enrolled full time in school for any five months of the year. A month is included if he/she attended school for any number of days during the month. In the example you provided, the months of January and May are counted as full months because she attended school during those months.

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