Bill Seeks to Change Student Rule for LIHTC Properties

Former homeless youth who currently attend school full time could be eligible to reside in low-income housing tax credit units, if legislation sponsored by Rep. Jim McDermott of Washington is enacted. Currently, homeless youths cannot do both and must decide between pursuing a full-time education and remaining homeless or finding employment to avoid being homeless, according to McDermott.
The bill would change the “student rule” in the LIHTC program, which prohibits tenants from being full-time students. The original intent of the rule was to prohibit LIHTCs from being used to build dormitories and to prevent college students who temporarily have low incomes from benefiting from the resources meant for those with even more serious housing needs.

A number of individuals are currently exempt from the rule, including former foster youths, single parents, and parents receiving public assistance. The bill would add homeless youths to this exemption, allowing these individuals to get an education while living in an LIHTC property.

The Joint Committee on Taxation estimates the bill will cost less than $1 million over 10 years. The bill has been referred to the House Ways and Means Committee.