So why does a homeowner or real estate investor with low-income real estate and LURA want to get confused? Tax credits. In exchange for land use restrictions, the LIHTC property owner receives tax credits that reduce federal income tax at the dollar-based basis. Tax credits also work with real estate. As a result, tax credits cannot be negotiated or sold individually. If LURA properties are sold, the sale may result in the new owner receiving tax credits. LURA walks with the country. This means that when the new owner is sold, he will have to comply with the terms of the LURA. Lenders must also declare themselves ready to be subordinated to the LURA. The initial 15-year compliance period is implemented by IRS rules.
The extension of the useful life, which is often an additional 15 years, is applied by state rules. Details can vary and can be found in the various LURA agreements. The only projects eligible for points in this assessment category are those that include the renovation of residential buildings (currently in service) that were last commissioned before 2002 and for which 1) income restrictions were imposed by a land use limitation contract or LIHTC CCS, federal or local authorities for affordable housing, or 2) project-based rental aid for at least 60% (60%) units. What is a Land Use Agreement (LURA) A Land Use Restriction Agreement (LURA) subjects multi-family real estate to a land use restriction contract (LURA) in which the owner waives part of his land use rights in exchange for the commitment of future tax credits, restrictions on tenant income, rental restrictions for lower-income tenants and other accessibility restrictions. Restrictions on land use are recorded in the ARUA, which is registered in the public registration and works with the country (i.e. the restriction of actions). As the LURA works with the land, if an apartment building is sold during the term of the contract, the LURA restrictions are mandatory for the purchaser. The objective of a LURA is to provide affordable housing to low-income households by limiting the maximum rent that can be calculated for a unit and by requiring that certain units or units be made available only to households with incomes below one percentage (for example. B 40%, 60%, 80% of average median income. Ground restrictions are maintained during periods of limitation and compliance.
The termination of LURA is based on: (a) compliance and limitation deadlines naturally expire in accordance with the LURA agreement; b) silos of lenders; C) certain qualified termination procedures. LURA — The owner`s land use restriction agreement at the time of purchase, which sets out the owner`s obligation to comply with the occupancy, tenancy and resale restrictions on the owner`s property. Multi-family real estate with a LURA contract or other regulatory contract (HAP contract) that limits rents and/or income is underwritten and treated differently from traditional market real estate.