chfa enews - multifamily loan compliance

colorado 2022 income limit and maximum rent tables published

 April 22, 2022
On April 19, 2022, HUD released updated Multifamily Tax Subsidy Program income limits. The 2022 income limit and maximum rent tables for Colorado are now available on CHFA’s website.

IRS Revenue Ruling 94-57 allows Housing Tax Credit project owners to rely on the previous year’s income limits until 45 days after HUD has released new income limits. The same timeframe applies to developments financed with CHFA multifamily loans. Therefore, the 2022 income and rent limits must be implemented no later than June 3, 2022.

Exceptions: The IRS allows two types of protection from rent decreases: HERA Special limits and the hold harmless rule. While only some Housing Tax Credit projects may use HERA Special limits, all Housing Tax Credit projects are “held harmless” from decreases in limits. To identify the correct limits for your project, you must know its placed-in-service (PIS) date.
  • In 2022, HERA Special limits are in place in 12 Colorado counties. To apply HERA Special limits, a Housing Tax Credit project must have PIS as of 12.31.2008. HERA Special limits do not apply to properties that were not financed with Housing Tax Credits (e.g., properties with only CHFA multifamily loans).

  • Remember, once your Housing Tax Credit project is placed in service, it is not subject to any decrease in limits. To be “held harmless,” a Housing Tax Credit project must have PIS prior to the implementation date of the new limits. This year, Housing Tax Credit projects whose counties experienced a decrease in limits and PIS before 06.03.2022, may continue to apply the same limits they used in 2021.

    CHFA extends this hold harmless protection to developments financed with CHFA multifamily loans, regardless of whether they were also financed with Housing Tax Credits.

  • New projects that place in service on or after 06.03.2022, must use the 2022 income limits.
Rent Increases: CHFA asks owners to be mindful of the impact on residents when considering any rent increases. CHFA does not require any owner to raise tenant rents, regardless of any increase in maximum rents, and owners may not attribute the cause of any tenant rent increase they implement to CHFA.

Any rent increases associated with higher maximum rents or utility allowance decreases may be implemented at lease renewal only and in accordance with Colorado state and local law. For the Housing Tax Credit and CHFA Loan programs, CHFA does not permit mid-lease term rent increases, unless required by the Section 8, USDA Rural Development, or similar rental assistance programs.

Utility Allowance Reminder: As a reminder, updated utility allowances must be implemented no sooner and no later than the first day immediately following the 90-day period that begins with the new utility allowance schedule’s effective date. To remain compliant when allowances increase and tenant rent must be decreased not to exceed the maximum rent, ensure that rents are lowered immediately following the 90-day period. Do not wait until a household is due for annual recertification to lower rents. For detailed guidance and exceptions, see CHFA’s Utility Allowance Policy for LIHTC and Multifamily Loan Developments.

Please contact your CHFA Program Compliance Officer with any questions. More information is also available in CHFA’s Multifamily Program Compliance Manual, Section 4.1 Income Limits and Maximum Rents and Section 4.2 Rent Increases.
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