3.1.12 Definition of Affordable Housing

A. Affordable housing for FHA multifamily mortgage insurance programs is defined as projects meeting either the minimum affordability requirement for Low Income Housing Tax Credits LIHTC) or the requirements for project-based Section 8.

B. To qualify under the LIHTC affordability requirement, rent and income restrictions must be imposed, monitored and enforced by a governmental agency for at least 15 years after Final Endorsement by means of a recorded Regulatory Agreement requiring the project to meet either of the LIHTC restrictions, including income averaging as applicable: 20% of units at 50% of area median income (AMI); or 40% of units at 60% of AMI.

C. Projects need not use LIHTCs to qualify for affordable underwriting so long as they meet the requirements for LIHTC affordability.

D. To qualify as affordable based on project-based Section 8, the project must have a Housing Assistance Payment contract covering 90% of the units with a minimum remaining term of 15 years.

E. Note that the definition of Affordable in this section is separate and distinct from the definition of Affordable and Broadly Affordable used to determine eligibility for a reduced MIP (See Section 3.1.10) or application fees for projects located in Opportunity Zones (See Section 3.1.36).