Section 142(d) restricts gross rent only where deep rent skewing is elected

bond.rent_limit.restriction_only_under_deep_rent_skewing · v1.0.0

The only gross rent restrictions section 142(d) imposes are the two conditions of the deep rent skewing election at 142(d)(4)(B)(ii) and (iii). The 20-50 and 40-60 tests of 142(d)(1) restrict who may occupy a share of the units by income; they do not cap what those units may be rented for. On a property that carries bonds and nothing else, the rent restriction an operator is complying with comes from the bond regulatory agreement or from state law, not from section 142(d). On a 4% deal it comes from section 42(g)(2), which caps gross rent at 30 percent of the imputed income limitation and applies to every low-income unit whether or not deep rent skewing was elected. Treating the bond set-aside as if it carried a rent cap, or assuming the bond and credit rent caps are the same instrument, is the most common way this regime is misread.

Confidence

high

Effective from

1986-10-22

Last reviewed

2026-08-30