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MMB Form S-Rental, Last Revised December 2019
<br />Page 2 of 2
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<br />Definition of Project Types
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<br />Preservation project. "Preservation project" means any residential rental project, regardless of whether or not the project is restricted
<br />to persons of a certain age or older, that is expected to generate low-income housing tax credits under section 42 of the Internal Revenue
<br />Code of 1986, as amended, and (1) receives federal project-based rental assistance, or (2) is funded through a loan from or guaranteed by
<br />the United States Department of Agriculture's Rural Development Program. In addition, to qualify as a preservation project, the amount of
<br />bonds requested in the application must not exceed the aggregate bond limitation.
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<br />30 percent AMI residential rental project. "30 percent AMI residential rental project" means a residential rental project that does
<br />not otherwise qualify as a preservation project, is expected to generate low-income housing tax credits under section 42 of the Internal
<br />Revenue Code of 1986, as amended, from 100 percent of its residential units, and in which:
<br />(1) all the residential units of the project:
<br />(i) are reserved for tenants whose income, on average, is 30 percent of AMI or less;
<br />(ii) are rent-restricted in accordance with section 42(g)(2) of the Internal Revenue Code of 1986, as amended; and
<br />(iii) are subject to rent and income restrictions for a period of not less than 30 years; or
<br />(2)(i) is located outside of the metropolitan area as defined in section 473.121, subdivision 2, and within a county or metropolitan area
<br />that has a current median area gross income that is less than the statewide area median income for Minnesota;
<br />(ii) all of the units of the project are rent-restricted in accordance with section 42(g)(2) of the Internal Revenue Code of 1986, as
<br />amended; and
<br />(iii) all of the units of the project are subject to the applicable rent and income restrictions for a period of not less than 30 years.
<br />In addition, to qualify as a 30 percent AMI residential project, the amount of bonds requested in the application must not exceed the
<br />aggregate bond limitation.
<br />For purposes of this definition, "on average" means the average of the applicable income limitation level for a project determined on
<br />a unit-by-unit basis for example, a project with one-half of its units subject to income limitations of not greater than 20 percent AMI and
<br />one-half subject to income limitations of not greater than 40 percent AMI would be subject to an income limitation on average of not
<br />greater than 30 percent AMI.
<br />50 percent AMI residential rental project. "50 percent AMI residential rental project" means a residential rental project that does
<br />not qualify as a preservation project or 30 percent AMI residential rental project, is expected to generate low-income housing tax credits
<br />under section 42 of the Internal Revenue Code of 1986, as amended, from 100 percent of its residential units, and in which all the residential
<br />units of the project:
<br />(1) are reserved for tenants whose income, on average, is 50 percent of AMI or less;
<br />(2) are rent-restricted in accordance with section 42(g)(2) of the Internal Revenue Code of 1986, as amended; and
<br />(3) are subject to rent and income restrictions for a period of not less than 30 years.
<br />In addition, to qualify as a 50 percent AMI residential rental project, the amount of bonds requested in the application must not exceed
<br />the aggregate bond limitation.
<br />For purposes of this definition, "on average" means the average of the applicable income limitation level for a project determined on
<br />a unit-by-unit basis for example, a project with one-half of its units subject to income limitations of not greater than 40 percent AMI and
<br />one-half subject to income limitations of not greater than 60 percent AMI would be subject to an income limitation on average of not
<br />greater than 50 percent AMI.
<br />100 percent LIHTC project. "100 percent LIHTC project" means a residential rental project that is expected to generate low-income
<br />housing tax credits under section 42 of the Internal Revenue Code of 1986, as amended, from 100 percent of its residential units and does
<br />not otherwise qualify as a preservation project, 30 percent AMI residential rental project, or 50 percent AMI residential rental project. In
<br />addition, to qualify as a 100 percent LIHTC project, the amount of bonds requested in the application must not exceed the aggregate bond
<br />limitation.
<br />20 percent LIHTC project. "20 percent LIHTC project" means a residential rental project that is expected to generate low-income
<br />housing tax credits under section 42 of the Internal Revenue Code of 1986, as amended, from at least 20 percent of its residential units and
<br />does not otherwise qualify as a preservation project, 30 percent AMI residential rental project, 50 percent AMI residential rental project,
<br />or 100 percent LIHTC project. In addition, to qualify as a 20 percent LIHTC project, the amount of bonds requested in the application must
<br />not exceed the aggregate bond limitation.
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<br />Additional Definitions:
<br /> Aggregate bond limitation. "Aggregate bond limitation" means up to 55 percent of the reasonably expected aggregate basis of a
<br />residential rental project and the land on which the project is or will be located.
<br /> AMI. "AMI" means the area median income for the applicable county or metropolitan area as published by the Department of
<br />Housing and Urban Development, as adjusted for household size.
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