What characterizes a project deemed "substantially rehabilitated" according to LIHTC criteria?

A project is considered "substantially rehabilitated" under the criteria set by the Low-Income Housing Tax Credit (LIHTC) program when it undergoes significant improvements, particularly through an investment of at least 20% of the building's adjusted basis. This threshold ensures that the project is not merely cosmetic in nature but involves considerable enhancement to the property's condition and functionality, which can include major repairs, upgrades to meet current building codes, and improvements necessary for tenant safety and comfort.

In the context of the LIHTC program, the emphasis on substantial rehabilitation serves to promote the transformation of older or deteriorating properties into viable housing options that meet contemporary living standards. This investment can also assist in revitalizing communities by attracting tenants and increasing economic stability.

The other options do not meet the criteria for substantial rehabilitation. Maintaining the original structure with minor updates does not indicate a significant enough investment or improvement. Projects designed specifically for temporary residents or those that provide emergency housing for the homeless may serve important needs but do not meet the substantial rehabilitation requirement outlined in LIHTC guidelines. Thus, the requirement for a minimum investment relative to the adjusted basis is a crucial marker of a project’s qualification as substantially rehabilitated.