Government Audit
LIHTC (Low-Income Housing Tax Credit) Audit
Modus helps LIHTC owners get Section 42 audits and cost certifications done at the speed of business.
A LIHTC audit is an independent examination of a Low-Income Housing Tax Credit property’s financial statements under IRC Section 42, and Modus helps you get one done at the speed of business. These properties answer to investors, lenders, and state housing agencies, and Modus brings top-firm rigor and AI-native speed to the audit and the certifications your partners expect.
What is a LIHTC audit?
A LIHTC audit is an independent examination of a Low-Income Housing Tax Credit property’s financial statements, performed under IRC Section 42. These properties generally need annual audited financial statements, and in the first year of the credit period they typically require a 10% cost certification supporting eligible basis.
Who needs a LIHTC audit?
- Owners and partnerships holding Section 42 tax credit properties.
- Developers completing a first-year cost certification.
- Properties with investor or syndicator audit requirements.
- Owners meeting state housing finance agency reporting rules.
What a LIHTC audit covers
- Annual audited financial statements under Section 42.
- First-year 10% cost certification supporting eligible basis.
- Partnership and investor reporting requirements.
- Compliance with state housing finance agency conditions.
- Internal control review over property financial reporting.
How Modus helps with your LIHTC audit
Modus is AI-native. Our tooling automates the time-intensive fieldwork behind a Section 42 engagement, so your LIHTC audit gets done in roughly four weeks. Every conclusion links to a source document, so investors, lenders, and agencies can trace the evidence. That means fewer document requests, fewer questions, and less disruption to your property staff.
Why choose Modus
- Top-firm audit rigor at a middle-market price.
- Roughly a four-week turnaround through AI-native fieldwork.
- Financial statement audit and first-year cost certification support under one team.
- Source-linked workpapers built for investor and agency review.
- Up to about 50% fewer questions during the engagement.
Frequently asked questions
What is a 10% cost certification?
In the first year of the credit period, LIHTC properties generally need a cost certification that supports the eligible basis used to calculate the tax credit. Modus helps you get this certification done alongside the financial statement audit.
Do LIHTC properties need an audit every year?
Section 42 properties generally require annual audited financial statements, and most investor and agency agreements reinforce that. Modus helps you get the audit done each year on a predictable schedule.
How does Modus keep LIHTC audits efficient?
Our AI-native tooling automates routine testing and document review, supporting a roughly four-week turnaround. That keeps the engagement moving without adding burden on your property team.
Why Modus
Audits at the speed of business
Modus helps you get a faster, higher-quality LIHTC (Low-Income Housing Tax Credit) Audit — top-firm rigor, source-linked workpapers, and far fewer questions for your team.
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