Section 42 Housing Iowa

This notification must also be provided by march 1 of the assessment year.

Section 42 housing iowa. Developers then receive a federal tax credit from the government. The average voucher holder contributes 0 towards rent in grimes. Housing choice vouchers in grimes iowa.

The program regulations are under section 42 of the internal revenue code. In return for this tax credit investors provide important equity to insure that quality housing can be constructed with rents that remain affordable. The tax credit encourages developers to build affordable housing to meet the needs of the community.

The maximum amount a voucher would pay on behalf of a low income tenant in grimes iowa for a two bedroom apartment is between 810 and 990. In order to receive the credit the developers agree to maintain properties in a safe and decent condition plus maintain income and rent restrictions while they are receiving the credit. Investors receive a reduction in their tax liability in return for providing affordable housing to persons with fixed or lower incomes.

The capitalization rate for january 1 2020 assessments of section 42 housing property in iowa is 8 88. Affordable rents are defined and calculated based on median household income figures published annually by the u s. As a condition for receiving housing tax credits owners must keep the units affordable for a specified number of years.

Section 42 of the internal revenue code addresses two issues. On average section 8 housing choice vouchers pay grimes landlords 0 per month towards rent. Section 42 reporting form 57 014 excel.

Department of housing and urban development hud. A 500 penalty is imposed for failure to notify the assessor when a property is withdrawn from the section 42 program. It establishes a method for determining the income eligibility.