Understanding the Difference between Qualified Basis and Eligible Basis in Affordable Housing

At Olympia Management, we pride ourselves on providing exceptional affordable housing options to individuals and families in need. As part of our commitment to transparency and education, this blog aims to shed light on the difference between two important terms in the affordable housing industry: qualified basis and eligible basis. Understanding these concepts is crucial for both tenants and those involved in affordable housing development and management.

Key Points:

1. What is qualified basis?
   • The qualified basis refers to the portion of a low-income housing tax credit (LIHTC) property that is eligible for tax credits.
   • It is calculated based on the number of affordable units and their income restrictions.
   • The qualified basis is important for developers as it determines the amount of tax credits they can receive.
2. What is eligible basis?
   • The eligible basis represents the total development cost of a low-income housing project that can be used to claim tax credits.
   • It includes both the cost of constructing or rehabilitating the property and certain soft costs.
   • The eligible basis serves as the foundation for determining the amount of tax credits a project is eligible to receive.
3. The relationship between qualified basis and eligible basis:
   • While both terms relate to the allocation of tax credits, there are distinct differences between them.
   • The qualified basis focuses specifically on the portion of the project that contains affordable units and meets the income restrictions.
   • The eligible basis, on the other hand, encompasses the entire development cost, including both affordable and market-rate units.
4. Importance for tenants:
   • Understanding the difference between qualified basis and eligible basis can help tenants determine their eligibility for affordable housing.
   • By knowing the qualified basis, tenants can ensure that the property they are interested in meets the income requirements necessary for affordable housing.
5. Importance for developers and managers:
   • For developers and property managers, grasping the distinction between qualified basis and eligible basis is essential when planning, financing, and managing affordable housing projects.
   • Properly allocating the qualified and eligible basis allows for accurate calculation of tax credits, ensuring financial viability and compliance with affordable housing regulations.

At Olympia Management, we firmly believe that knowledge is power, and by understanding the nuances of affordable housing terms like qualified basis and eligible basis, tenants, developers, and managers can make informed decisions that positively impact individuals and communities.

We remain steadfast in our commitment to providing high-quality living conditions, exceptional management, and unwavering support for the well-being of our residents. By prioritizing security, peace of mind, and affordability, Olympia Management continues to elevate the standard of affordable housing across the nation.

If you have any further questions or would like to learn more about our affordable housing options, please do not hesitate to reach out to our dedicated team. We are here to help you every step of the way.