What should a property owner do if they fail to meet the minimum set-aside election requirement?

When a property owner fails to meet the minimum set-aside election requirement, no tax credits would be available that year. This outcome is critical because the set-aside requirement is a fundamental condition for obtaining Low-Income Housing Tax Credits (LIHTC). The minimum set-aside defines the percentage of a building's total units that must be reserved for low-income tenants. Failure to meet this requirement means that the property does not comply with the regulations set forth by the tax credit program, leading to ineligibility for the credits in the current year.

Understanding this mechanism emphasizes the importance of compliance with all program requirements for housing tax credits. Additionally, failing to secure tax credits can significantly affect the financial viability of a housing project, potentially impacting future funding opportunities and overall property management strategies. While seeking additional funding, notifying tenants, or consulting advisors may be necessary steps in managing the consequences, none of these directly address the immediate loss of credits due to non-compliance with the minimum set-aside.