Tax Credit Program Eligibility for Disabled Veteran Returning to School

Q: We have a single disabled veteran who moved into one of our 100 percent tax credit units in 2012. This resident holds a HUD-VASH (Veterans Affairs Supportive Housing) Voucher and at the request of the VA may be returning to school and becoming a full-time student. We learned this during a conversation with him regarding his upcoming recertification. Can he still be eligible for the tax credit program? The resident was homeless before receiving his voucher and is a disabled veteran, as well as an excellent tenant whom we want to assist without risking our tax credits.

A: Unfortunately, assuming this is a one-person household, he wouldn’t be eligible for the program. If he becomes a full-time student, then the household will be comprised entirely of full-time students. When that occurs, the household must meet one of the five exceptions to qualify, says tax credit consultant Karen Graham.

Unfortunately, being a veteran, disabled, or previously homeless doesn’t meet one of the exceptions. Unlike income, there’s no grandfathering for a tenant who wasn’t a student when he moved in and later became one. The five exceptions are as follows:

• Married filing jointly;
• Single parent with dependent children;
• Household member receiving Temporary Assistance for Needy Families (TANF);
• In a federal job training program; and
• Previously in foster care.

However, legislation that would add an exception for previously homeless individuals has recently been introduced, points out tax credit expert Greg Proctor. Rep. Jim McDermott, D-Wash., introduced H.R. 3145, legislation to permit students who were formerly homeless, including formerly homeless veterans, to live in LIHTC housing. In addition, Senators Al Franken and Rob Portman recently introduced The Housing for Homeless Students Act of 2014, which is intended to ensure that individuals, including veterans, who have experienced homelessness have access to affordable housing while they pursue an education.

Insider Sources

Karen A. Graham, CPM(R), HCCP, SHCM: President, Karen A. Graham Consulting, LLC; www.compliancesupport.com.

Gregory Proctor, SHCM, NAHP(e): Business Development, Windsor Compliance, a RealPage Company; www.windsorcompliance.com.