Elder Resource Benefits Consulting

Also know as "LIHTC" or "Tax Credit"  This is another good Federal program - but
it is difficult to find out about it on the internet. 

When a facility is being built or rehabilitated, there is an opportunity for the developers to obtain favorable financing (Tax Credits) from the U.S. Government via the Department of Housing and Urban Development ("HUD") in exchange for maintaining a certain number of Low Income units. 

The amount of units required to be maintained, how they are designated and the rate charged depends on many factors.

There is usually a two - three year waiting list for this program.  The rooms may or may not be specifically designated for Low Income.  A facility may need to have 10 rooms as Low Income and may make sure that 10 rooms at any given time are occupied at the Low Income Rate.  Alternatively, a facility may carve out 10 rooms that are the LIHTC rooms - these tend to be a little more run down, so do your homework.

Here is a common way the Low Income Housing Tax Credit Works:

Assume ALF received funding and has to offer 10 units at 60% of the standard room rate.

The Maximum Annual Income for a Couple in 2008 is $41,160.  A couple with income under that limit would pay 60% of the standard rate PLUS 2% of their assets.

Here are some examples:

Assume standard room rate of $4,000 per month, Income under annual limit

       1. Person with $10,000 in assets

                Standard rate at 60%  = $2,400
                2% of assets                =       200
            Total Monthly Fee   $2,600 per month

       2. Person with $100,000 in assets would have a calculated pay of $4,160 and
           would obviously not want to be on the program but rather should be on the
           waiting list. $2,160 ($3,600*60%) + $2,000 ($100,000).  

      $70,000 in assets is the breakeven point in this example - the point at which the
      resident pays the same under the standard rate or Tax Credit Program.

Here is the table of Maximum Income Limits for Couples and Individuals for 2008. 

NOTE- Each participating facilities HUD program is different, you need to understand
what the facilitiy is offering - Many only have the 60% program while others offer all
of the different rates.