# LIHTC compliance software that keeps every certification review ready

> LIHTC compliance is the ongoing obligation attached to the Low Income Housing Tax Credit under Internal Revenue Code Section 42: keeping qualifying households in qualifying units, at restricted rents, certified and documented, across a 15 year compliance period and an extended use period usually running at least 30 years. State agencies review files and inspect units at least once every 3 years under 26 CFR 1.42-5, and findings go to the IRS on Form 8823. Neurobird keeps the file ready.

- URL: https://neurobird.com/lihtccompliance/
- Product: Neurobird LIHTC Compliance Platform
- Niche: LIHTC compliance
- Buyer: LIHTC owners and property managers
- Status: in development, open for early access
- Updated: 2026-08-21

## What Neurobird LIHTC Compliance does

- Track every tenant income certification and recertification against its due date
- Apply current income and rent limits by set aside so nobody is certified against last year's numbers
- Hold third party verifications with the certification they support, not in a separate folder
- Monitor the applicable fraction and set aside so a unit change does not quietly break the test

## How it works

1. **Build the certification file** The tenant income certification, every third party verification and the signed forms live together, so nothing supports a certification from a different folder.
2. **Apply the right limits** Income and rent limits are held by year and by set aside, so a recertification is never run against a superseded table.
3. **Stay review ready** Unit status, applicable fraction and the 3 year review cycle under 26 CFR 1.42-5 are tracked continuously, so a state agency visit is a read rather than a scramble.

## From the source material

> Full-time student households must meet one of the exceptions continually to live in an LIHTC unit for the period that everyone is a full-time student.

Source: dca.georgia.gov, https://dca.georgia.gov/document/manuals/dca-lihtc-home-compliance-manual/download

## Industry context

- **42** Internal Revenue Code Section 42 creates the Low Income Housing Tax Credit and every compliance obligation that follows from it, including the 15 year compliance period. (source: US Code, 26 U.S.C. 42, https://www.govinfo.gov/content/pkg/USCODE-2023-title26/html/USCODE-2023-title26-subtitleA-chap1-subchapA-partIV-subpartD-sec42.htm)
- **1.42-5** The compliance monitoring regulation at 26 CFR 1.42-5 sets what state agencies must review, how often units are inspected, and what records owners must keep. (source: eCFR, 26 CFR 1.42-5, https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR6c3d1a1a0d1e0d0/section-1.42-5)
- **8609** Form 8609 is issued per building by the state housing credit agency and carries the minimum set aside election the property lives with for its whole compliance period. (source: IRS, About Form 8609, https://www.irs.gov/forms-pubs/about-form-8609)
- **8823** Form 8823 is how a state agency reports noncompliance or a building disposition to the IRS, which is why file review findings carry real consequence. (source: IRS, Form 8823, https://www.irs.gov/pub/irs-pdf/f8823.pdf)
- **3 years** State agencies must inspect units and review supporting documentation at least once every 3 years under the federal monitoring rules. (source: eCFR, 26 CFR 1.42-5, https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR6c3d1a1a0d1e0d0/section-1.42-5)

## Pricing

- Single property: $130 per property, per month
- Portfolio: $300 per property, per month
- Owner operator: $540 per property, per month

## Questions

### What is LIHTC compliance?

LIHTC compliance is the ongoing obligation attached to the Low Income Housing Tax Credit under Internal Revenue Code Section 42: keeping qualifying households in qualifying units, at restricted rents, certified and documented, for a 15 year compliance period and a longer extended use period, usually at least 30 years in total.

### What are Forms 8609 and 8823?

Form 8609 is the low income housing credit allocation and certification issued by the state housing credit agency for each building, and it carries the elections the property will live with. Form 8823 is the report of noncompliance or building disposition that the state agency files with the IRS when it finds a problem.

### How often does a state agency review files?

Under the monitoring rules in 26 CFR 1.42-5, state agencies must review tenant certifications and supporting documentation and physically inspect units on a recurring cycle, at least once every 3 years, with a sample of units drawn at each property.

### What is the minimum set aside?

The owner elects a minimum set aside on Form 8609: 20 percent of units at 50 percent of area median income, 40 percent at 60 percent, or the average income test where units average no more than 60 percent across designated income levels. The election is irrevocable and it governs every subsequent certification.

### Does this replace our property management system?

No. Rent roll and accounting stay where they are. This holds the compliance layer: certifications, verifications, limits by year, unit status and the evidence a state agency reviewer asks to see.

## Sources

- [26 U.S.C. 42, low income housing credit](https://www.govinfo.gov/content/pkg/USCODE-2023-title26/html/USCODE-2023-title26-subtitleA-chap1-subchapA-partIV-subpartD-sec42.htm)
- [26 CFR 1.42-5, compliance monitoring](https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR6c3d1a1a0d1e0d0/section-1.42-5)
- [IRS, About Form 8609](https://www.irs.gov/forms-pubs/about-form-8609)
- [IRS audit technique guides](https://www.irs.gov/businesses/small-businesses-self-employed/audit-techniques-guides-atgs)

## Contact

- office@neurobird.com
- https://neurobird.com/