LIHTC Income Recertification When Your Income Rises
Annual recertification, the 140% over-income rule, the next-available-unit rule, and what happens to your rent in a LIHTC apartment.
What Recertification Is
Once a year, LIHTC compliance offices re-verify your income, household composition, and any relevant deductions. You provide current pay stubs, benefit letters, and/or self-employment documentation. They calculate your annualized income and compare it to the current tier limit.
Most tenants sail through recertification with no change to their tenancy or rent.
The Three Common Outcomes
1. Income still under the tier limit. No change. Same unit, same rent.
2. Income above the tier limit but under 140%. You keep your unit. LIHTC rent is capped by tier, so it doesn’t automatically rise. The property remains compliant.
3. Income above 140% of the tier limit. The next-available-unit rule applies: the property must rent the next comparable vacancy to a new income-qualified household. You typically keep your unit. Whether your rent can rise toward market depends on specific policy.
Why the 140% Rule Exists
It’s a compliance rule under IRS Section 42. The property has to maintain a target share of units at the applicable AMI tiers. If existing tenants’ incomes rise substantially, the property makes up for it by placing new lower-income households in the next vacancies.
What You Bring to Recertification
- Current pay stubs (last 2-3 months) for each working adult
- Benefit award letters (SSI, SSDI, VA, pension)
- Tax returns if self-employed
- Bank statements (if self-employed)
- Any change-of-composition documentation
Interim Recertification
If your income drops significantly mid-year, request an interim recertification. LIHTC rent is tier-capped either way, so it doesn’t drop, but it protects your tier eligibility.
Household Changes
Adding or removing household members triggers a recertification-style review. Bring updated documentation.
