The U.S. Department of Housing and Urban Development (HUD) annually releases income limits to determine eligibility for low-income housing tax credit (LIHTC) properties. HUD also releases caps that determine the maximum annual income a family can have and still be eligible to occupy HUD-assisted and LIHTC-financed housing, as well as to determine the maximum rent that tenants can be charged. On this week’s Tax Credit Tuesday, Michael Novogradac, CPA, and Thomas Stagg, CPA, discuss the income limits cap–which is 5.92% this year–and whether HUD could have a more predictable methodology to set the cap. They discuss what the cap affects, the history of income limit caps and speculate why HUD changed its methodology in 2022. After that, they look at how a lack of predictability is a challenge in affordable housing, possible methodologies HUD could use and look at key upcoming dates in setting the 2024 income limits and cap.