Deep rent skewing is an owner election carrying three conditions that must hold throughout the qualified project period

bond.set_aside.deep_rent_skewed_election_conditions · v1.0.0

The owner - not the issuer - may elect deep rent skewing under 142(d)(4)(B). The election is only effective while the project meets all three of the following at all times during the qualified project period: 15 percent or more of the LOW-INCOME units are occupied by individuals whose income is 40 percent or less of area median gross income; the gross rent on each low-income unit does not exceed 30 percent of the applicable income limit for the individuals occupying it; and the gross rent on each low-income unit does not exceed one half of the average gross rent on units of comparable size that are NOT occupied by individuals meeting the applicable income limit. The third condition is a floating test measured against the project's own market rents and can be failed by raising market rents alone. The 15-40 test is not an additional way of satisfying the 142(d)(1) set-aside; it is a condition of the election that changes how a continuing resident's income is treated.

Confidence

high

Effective from

1986-10-22

Last reviewed

2026-08-30