Being a recent college graduate, I was often frustrated with how expensive rent can be, especially in comparison to how little I was able to work and make money as a full-time college student. Taking 14-18 credits per semester didn’t leave much time to work. While my income level may have been low enough to qualify for a low-income unit, there was one major factor that disqualified me: being a full-time student.
The IRS considers any individual who is enrolled in classes (kindergarten through 12th grade, or qualifying education organization) for five months, consecutive or nonconsecutive, of the calendar year to be a full-time student. According to legislative history, “In no case is a unit considered to be occupied by low-income individuals if all occupants of such unit are students (as determined under sec. 151(c)(4)), no one of whom is entitled to file a joint income tax return.” Notice the exception for filing joint income tax returns? This is just one of five exceptions for the LIHTC student rule.
Without meeting one the above exceptions to the student rule, the LIHTC program does not allow households made up of entirely full-time students to lease at tax credit properties.