15 Ark. Code of Rules § 86-303
Maximum gross rents
Operative Text
15 CAR § 86-303. Maximum gross rents. (a)(1)(A) Units qualifying for tax credits are subject to a rent restriction formula that sets the maximum gross rent that may be charged. (B) The maximum gross rent (including utilities) may not exceed thirty percent (30%) of the imputed income limitation. (2) If low-income tenants are charged more than the allowable rent: (A) The unit is in noncompliance; and (B) Recapture of credits may result. (3)(A) Whenever utility costs are paid directly by the tenant, gross rent must include an allowance for utilities. (B)(i) Telephone and cable are not considered to be essential utilities and are not included in the allowance for utilities. (ii) See 15 CAR § 86-308 for a discussion of telephones. (b)(1) Maximum gross rent = (applicable income limit x 30%) divided by twelve (12). (2) Remember that the tenant's rent plus the utility allowance cannot exceed the maximum gross rent. (c)(1) If the rent calculation ends with an amount beyond the decimal point, you must not round the amount up. (2) Rounding up would charge more than the maximum allowable rent, thus resulting in noncompliance. Example: If the applicable income limit is twenty-one thousand seven hundred fifty dollars ($21,750), multiply by three-tenths (.30) to get six thousand five hundred twenty-five dollars ($6,525), and then divide by twelve (12) to get five hundred forty-three dollars and seventy-five cents ($543.75). You may round this amount down to five hundred forty-three dollars ($543) but you cannot round up to five hundred forty-four dollars ($544). The maximum gross rent including the utility allowance cannot exceed five hundred forty-three dollars and seventy-five cents ($543.75). (d) 1987–1989 developments. (1) For developments with 1987, 1988, or 1989 tax credit allocations, the unit rent is calculated using the income limit for the actual number of people in the household. (2) Thus, the maximum rent can increase or decrease based on respective changes in the household composition. # Persons 1 2 3 4 5 6 Income Limits 50% 12,150 13,900 15,600 17,350 18,750 20,150 60% 14,580 16,680 18,720 20,820 22,500 24,180 (3) The resulting maximum allowable rents (including utility allowance) based on household size equals (limit x 30%) ÷ 12: # Persons 1 2 3 4 5 6 Rents 50% 303 347 390 433 468 503 60% 364 417 468 520 562 604 (4) The rent decreases based on a reduction in household composition or a decrease in the income limits. (e) 1990+ developments. (1)(A) For developments with 1990 and subsequent allocations, the rent formula uses an imputed family size of one and one-half (1.5) persons per bedroom to determine the applicable income limit to be used for rent calculations. (B) For efficiency or studio units, the one-person income limit is used. (2)(A) To determine which income limit is used for the bedroom size rent formula, use the imputed household size of one and one-half (1.5) persons times actual number of bedrooms. (B) Studio, one (1) person. (C) One (1) bedroom, one and one-half (1.5) persons. (D) Two (2) bedrooms, three (3) persons. (E) Three (3) bedrooms, four and one-half (4.5) persons. (F) Four (4) bedrooms, six (6) persons. (3)(A)(i) For the one and one-half-person income limit, take the one-person limit, add to the two-person limit, and divide by two (2). (ii) Multiply your answer by thirty percent (30%) and divide by twelve (12) to arrive at maximum rent. (B)(i) Two (2) bedrooms: 1.5 x 2 = 3. (ii) Use the income for three (3) persons x thirty percent (30%) divided by twelve (12) = maximum rent. (C)(i) Three (3) bedrooms: 1.5 x 3 = 4.50, which means that you take the income limit for four (4) persons and add to the income limit for five (5) persons, divide by two (2). (ii) Multiply by thirty percent (30%) and divide by twelve (12) = maximum rent. (D)(i) Four (4) bedrooms: 1.5 x 4 = 6. (ii) Use the income limit for six (6) persons x thirty percent (30%) divided by twelve (12) = maximum rent. (4) Income limits sample. # Persons 1 2 3 4 5 6 Income Limits 50% 12,150 13,900 15,600 17,350 18,750 20,150 60% 14,580 16,680 18,720 20,820 22,500 24,180 (5) Maximum rents sample. # Bedrooms 0 1 2 3 4 Income Limits 50% 303 325 390 451 503 60% 364 390 468 541 604 (6) Note. (A) For certain projects and depending on the project's rent floor election effective date, rents may be higher than the rent limits derived from the MTSP income limits. (B) LIHTC project owners can elect to have their rent floor effective on: (i) The date of their carryover allocation; or (ii) The date the project is placed in service. (C) Owners must notify the Arkansas Development Finance Authority if choosing the rent floor election.
Section 86-303 of the Arkansas Low-Income Housing Tax Credit (LIHTC) regulations establishes a cap on the gross rent—including utilities—that may be charged for tax-credit-assisted units. The cap is calculated as 30% of an imputed income limit divided by 12, with the specific income limit varying by unit bedroom size (for 1990+ developments) or actual household size (for 1987–1989 developments). Rounding the resulting figure upward is expressly prohibited, as doing so would push rent above the allowable maximum and place the unit in noncompliance, potentially triggering recapture of tax credits.
Plain English — not legal advice.
Operators of LIHTC properties in Arkansas must apply the rent formula set out in § 86-303 to every tax-credit unit, ensuring that the combined total of tenant-paid rent and any utility allowance never exceeds the calculated maximum gross rent. For developments placed in service in 1990 or later, the applicable income limit is determined by imputing 1.5 persons per bedroom rather than actual household size, while 1987–1989 developments use actual household composition. Compliant operators also track rent floor election dates and notify the Arkansas Development Finance Authority when electing a rent floor, as required under § 86-303(e)(6).
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Under § 86-303, tenants living in LIHTC-assisted units have a regulatory protection against being charged more than 30% of the applicable imputed income limit (divided by 12), with any utility costs factored into that ceiling. If a tenant believes the rent charged—combined with the utility allowance—exceeds the maximum permitted under § 86-303, that concern can generally be raised with the Arkansas Development Finance Authority, which oversees LIHTC compliance in the state. Tenant-rights organizations familiar with affordable housing programs can help explain how the rent and utility allowance calculations apply to a particular unit type.
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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