Income Averaging Calculator

Income averaging election allows LIHTC mix from 20–80% AMI, averaged at <=60% project-wide.

Total units

Units at 20% AMI

Units at 50% AMI

Units at 60% AMI

Units at 70% AMI

Units at 80% AMI

Average AMI %

0.58%

Passes ≤60% test

Yes

Total restricted units

100

How the math works

Average AMI = Σ(units at tier × tier %) / total units.

(10×20 + 20×50 + 40×60 + 20×70 + 10×80) / 100 = 5,400/100 = 54% average. Passes 60% test.

How to Use

Enter total units.
Enter units at 20% ami.
Enter units at 50% ami.
Enter units at 60% ami.
Enter units at 70% ami.
Enter units at 80% ami.
Read average ami %.

Frequently Asked Questions

Income averaging mechanics?

Available since 2018 (CAA 2018). Allows units at 20%, 30%, 40%, 50%, 60%, 70%, 80% AMI. Project-wide AVERAGE must be ≤60% AMI. Each unit at its tier rent (not project-wide). Benefit: serves wider income range, makes deal feasible in higher AMI markets where 60% rent doesn't cover debt. Risk: "next available unit rule" — failure to maintain average can recapture ALL credits (more catastrophic than fail in standard). Tracking complexity high; requires sophisticated compliance.

How does this asset class compare to traditional CRE?

Specialty assets (self-storage, RV parks, MHP, marinas, cold storage, data centers, parking, car wash, QSR/c-store, billboards, cell towers) typically offer higher cap rates than office/retail but with more operational complexity. They reward specialized operators with deep market knowledge. Lender pool is narrower, capital costs sometimes 50–150 bps higher, but downside resilience often better.

Capex and operational considerations?

Specialty assets often have heavier operational burden than passive triple-net retail. Self-storage, RV, MHP: tenant turn, security, basic upkeep. Marinas, parking, car wash: equipment-heavy with replacement reserves. Cold storage, data center: utilities are major cost. Billboards, cell towers: minimal opex, near-passive. Match management capacity to asset operational intensity.

Exit strategy?

Specialty asset cap rates have compressed significantly over last cycle but volatility is real. Buyers: REITs, private equity rollups, regional operators, 1031 buyers. Strong NOI history, environmental clarity (especially for car wash, gas station), and lease structure (for billboards, cell towers) drive valuation. Plan exit 24+ months in advance for best execution.