### Question
How is the "qualified residential rental project" defined?


### Answer
The term **qualified residential rental project** is defined in *26 U.S.C. § 142* as follows -

> any project for residential rental property if, at all times during the qualified project period, such project meets the requirements of subparagraph (A) or (B), whichever is elected by the issuer at the time of the issuance of the issue with respect to such project:


#### (A) 20–50 test


The project meets the requirements of this subparagraph if 20 percent or more of the residential units in such project are occupied by individuals whose income is 50 percent or less of area median gross income

#### Citation:
  - *26 U.S.C. § 142*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter B-Computation of Taxable Income > PART IV-TAX EXEMPTION REQUIREMENTS FOR STATE AND LOCAL BONDS > Subpart A-Private Activity Bonds**

