15 Ark. Code of Rules § 86-316
Suitability of unit
Operative Text
15 CAR § 86-316. Suitability of unit. (a)(1) A unit must be suitable for occupancy in accordance with state or local codes in order for credits to be claimed. (2) If the unit is not habitable, no credits can be claimed. (b)(1) The Internal Revenue Service has ruled that if a unit is destroyed due to a casualty loss (i.e., fire, flood, or other disaster), credits cannot be claimed while the unit is being replaced. (2) Owners must report a casualty loss to the Arkansas Development Finance Authority within thirty (30) days following the loss. (3) If the building or unit is restored within a reasonable time, credits can again be claimed and no recapture would occur. (c) What is a reasonable replacement time. (1) The reasonableness of the time period to repair damaged property depends on the extent of the damage. (2) The authority will consider other factors such as the: (A) Location of the property; and (B) Time of the year. (3)(A) Generally, however, two (2) years should be sufficient for the replacement of property completely destroyed by a casualty loss. (B) In the event the owner is not able to replace the property within two (2) years, the authority may extend the time period if the owner demonstrates that there is a reasonable cause for delay.
Section 86-316 of the Arkansas Low-Income Housing Tax Credit regulations establishes that a housing unit must meet state or local habitability codes before tax credits can be claimed for it. If a unit is destroyed by a casualty event such as a fire, flood, or other disaster, credits cannot be claimed during the period the unit is being rebuilt. Once the unit is restored within a reasonable timeframe—generally understood to be two years, though extensions may be granted—credit eligibility resumes and no recapture of previously claimed credits occurs.
Plain English — not legal advice.
Under § 86-316, compliant operators ensure that every unit for which Low-Income Housing Tax Credits are claimed meets applicable state or local occupancy codes at all times. When a casualty loss occurs, owners are required to notify the Arkansas Development Finance Authority within 30 days of the loss and must document restoration efforts to demonstrate that repairs are proceeding within a reasonable timeframe. Owners who anticipate that rebuilding will take longer than two years should proactively communicate with the Authority and be prepared to show reasonable cause for any delay in order to seek a time extension.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Section 86-316 is primarily directed at property owners and the Arkansas Development Finance Authority rather than tenants, but it has indirect relevance to renters in tax-credit properties. The provision makes clear that units must be habitable and meet state or local codes for the property to receive credits—meaning tenants in such properties have a baseline habitability standard tied to the credit program. Tenants who believe their unit does not meet habitability standards may wish to consult a tenant-rights organization or contact the Arkansas Development Finance Authority to understand how § 86-316 interacts with their housing situation.
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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