15 Ark. Code of Rules § 86-404
Assets
Operative Text
15 CAR § 86-404. Assets. (a)(1) The net income from assets must be considered when determining the tax credit eligibility of a household. (2) Asset information for all household members (including minors) should be obtained at the time of application. (3) Please refer to the latest revision of the Department of Housing and Urban Development Handbook 4350.3 for a discussion of assets. (b)(1) For LIHTC program purposes, third-party verification of assets is required only if assets exceed five thousand dollars ($5,000) per household. (2) The Arkansas Development Finance Authority will accept the Under $5,000 Asset Certification for tax credit units only. (3)(A) Under the HOME or other federal programs, all assets, regardless of value, must be documented by third-party verification. (B) For example, if a tax credit unit is also HOME-assisted, the owner must comply with the stricter HOME verification requirement. (c)(1) The Under $5,000 Asset Certification must be completed accurately. (2) There should be no blank lines. (3) Owners or managers should always question the reasonableness and compare the amounts on the form to the application. (d)(1) If net family assets total five thousand dollars ($5,000) or less, owners must count the actual income derived from net family assets. (2) If net family assets exceed five thousand dollars ($5,000), owners must impute the asset income by multiplying the net family assets amount by the passbook rate specified by the Department of Housing and Urban Development, which is currently two percent (2%). (3) The income to be included in household income will be the greater of: (A) Actual asset income; or (B) The imputed income from assets. (e)(1) At each certification and recertification, applicants and tenants must declare whether or not an asset has been disposed of for less than fair market value during the two (2) years preceding the: (A) Date of application; or (B) Effective date of the recertification. (2)(A) An asset is considered to be disposed of for less than fair market value if the cash value of the disposed asset exceeds the gross amount the family received by more than one thousand dollars ($1,000). (B) If it does, for a period of two (2) years owners must include in the total household assets the difference between the cash value of the asset and the amount received. (3) For examples of assets disposed of for less than fair market value, you should refer to the latest revision of the Department of Housing and Urban Development Handbook 4350.3.
Section 86-404 of the Arkansas Low Income Housing Tax Credit (LIHTC) regulations governs how household assets are counted when determining eligibility for tax credit housing. Net income from assets—whether actual or imputed using a HUD-specified passbook rate—must be factored into total household income calculations, with the higher of the two figures used. The rule also addresses assets that have been transferred for less than fair market value within the two years before application or recertification, requiring that the difference between an asset's cash value and the amount received be counted as a household asset for two years if that gap exceeds $1,000. Third-party verification requirements differ depending on whether a unit is LIHTC-only or also subject to HOME or other federal program rules.
Plain English — not legal advice.
Under 15 Ark. Code R. pt. 86 § 86-404, compliant operators collect asset information from all household members—including minors—at the time of application and at each certification or recertification. For LIHTC-only units, third-party verification is required when household assets exceed $5,000; the Arkansas Development Finance Authority's Under $5,000 Asset Certification is accepted for smaller asset totals, but owners and managers are expected to review it carefully for completeness and reasonableness against the application. When a unit is also HOME-assisted or subject to another federal program, the stricter third-party verification requirement applies regardless of asset value, and owners must impute asset income using the HUD passbook rate (currently 2%) whenever net family assets exceed $5,000.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Section 86-404 establishes rules that affect how your household's assets are evaluated when you apply for or recertify in a LIHTC property in Arkansas. At each application and recertification, you will be asked to disclose all assets and to declare whether any asset was transferred for less than fair market value in the prior two years—a transfer where the gap between the asset's cash value and what you received exceeds $1,000 can affect your income calculation for up to two years. If you believe an asset has been counted incorrectly or that the verification process was not applied consistently with this provision, tenant-rights organizations or a housing attorney familiar with Arkansas LIHTC regulations can help you understand your options, including raising concerns with the Arkansas Development Finance Authority.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated October 22, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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