MHDC Inspection Review Process. Tasha Douglas, Compliance Supervisor

Transcription

1 MHDC Inspection Review Process Tasha Douglas, Compliance Supervisor

2 Inspection frequency LIHTC Inspect at least as many units/files as specified by project size in the Low Income Housing Credit Minimum Unit Sample Size Reference Chart ( (c)(2)(iii)) s every 3 years. All buildings exterior, common area, HVAC system, etc. All vacant units. MHDC 10% units/files annually. All vacant units. HOME 20% every 2 years and not less than 4 units/files. All vacant units. Participation Loan (i.e. US bank)-annually. All vacant units. Management must provide notice to all residents advising them that their unit may be chosen for the inspection

3 Inspection Date is Confirmed APPOINTMENT LETTER AND ATTACHMENTS (at least 15 days notice of inspection) Appointment letter is mailed to the Owner and the Management Agent is copied Management Information Questionnaire EXHIBIT C-5 Addendum B (for properties with HOME funding) Management File Checklist Sent with boxes checked for required items

4 Management File Checklist Current Utility Allowance The maximum allowable rent calculation includes costs to be paid by the resident for utilities including: heat, electricity, water, sewer, oil, gas, or trash. Please Note: Range and Refrigerator are only included in the Utility Allowance amount if the resident supplies or leases the appliances. Utilities do not include telephone, cable, and/or internet (HR3221 Ruling)

5 Must have back up documentation, i.e. PHA Utility Schedule, HUD Rent Schedule, RD, Local Utility; Energy Consumption Model 2013 HOME Final Rule (HOME Rule) applies to developments with HOME funds committed after August 23, 2013; Projects from that date forward cannot use PHA utility allowance methods. For Further guidance see: ( Guidance-on-How-to-Establish-Utility-Allowances-for-HOME-Assisted-Rental- Units.pdf) THE TOTAL UTILITY ALLOWANCE MUST MATCH WHAT IS LISTED ON THE FORMS IN THE OCCUPANCY FILES AND AMRS

6 Affirmative Fair Housing Marketing Plan The AFHMP form must be updated: 1) every fifth year after the date of initial completion if owner review determines a new plan must be submitted; 2) when there is a management company change; 3) when the local community development jurisdiction's Consolidated Plan is updated if owner review determines a new plan must be submitted; 4) when substantial changes occur within the plan; or 5) when otherwise required or requested by MHDC or HUD. If there are no changes needed/a need to update, management must maintain a file documenting what was reviewed, what was found as a result of the review, and why no change is required.

7 Rent Schedule (Schedule II) MHDC Approved Know your property income limits and have available for review. It is the owner's responsibility to obtain the limits when they are published by HUD and to implement the new limits within 45 days of the effective date. Know your occupancy restrictions (see Land Use Regulatory Agreement (LURA)) Housing Priority Checklist (Exhibit Z) as posted on the MHDC website (for properties with Special Needs and/or Service Enriched Housing)

8 Training Certificates (training required every two years)-properties with staff responsible for day-to-day operations such as qualifying households who have not completed program training that satisfies MHDC s training requirements will be placed in non-compliant status. Copy of 8609 s w/part II completed and submitted to IRS with the Owner s 1st year tax return (if not yet submitted to MHDC) Current Rent Roll (Vacant units must have move-out dates included)

9 Copies of the following documents are required, ONLY if changes have been made in the past 12 months (or since the last review) 1. Resident Selection Criteria 2. Current Lease 3. HOME Lease Addendum 4. Rental Application 5. Pet Policy (required for Elderly/Section 8) 6. House Rules 7. Resident Damage Charge List (exclude market rate) 8. Applicant Rejection letter

10 Pre-inspection of the property Inspection Preparation Inspect all common areas including laundry rooms, emergency lights, elevator certificate, fire extinguisher tags, smoke detectors Walk all units paying special attention to the UPCS reportable items as well as any items noted for correction on the last inspection report Make sure keys (vacant and occupied) are available and working properly for all units. (Lost or missing keys are a common occurrence). All units and files must be available for the compliance review Make sure utilities are on and functioning in vacant units Make sure all ranges have anti-tip devices installed properly Remove all trash from vacant units Remove boards restricting access to any units

11 Send the rent roll 7 days prior to the inspection review as stated on the Exhibit C-4. The manager should know any property set-asides and the rent roll should clearly identify any set asides, i.e. HOME, PBS8, market, special needs, etc. (This helps CO with inspection prep if we know ahead of time) Be prepared to provide an updated rent roll on the day of inspection. Since COs travel often, they are not always in a position to print the rent rolls. If this is the case having one on the day of inspection can make a huge difference.

12 Have all requested documents available at the beginning of the inspection review. These items should be placed in the order of the inspection checklist Exhibit C-4. Having a system helps COs/them easily identify missing documents. Also management can call the CO if they are confused about what documents they need. If there are any insurance claims or FHEO concerns they should be prepared to provide copies of these documents as well.

13 Pre-file audit paying close attention to items noted for correction on the last inspection. Make sure all files are available and organized including calculation work sheet &/or calculator tapes showing income calculations. Check the MHDC website for any new Revision Notices, forms, or policy changes. Have sufficient maintenance staff available to walk units with the inspector. Secure file storage. Files should only be accessible to approved management staff.

14 Inspection tips/do s & don ts Any deficiencies present at the time of the review will be noted on the inspection report. Files should be securely in tact and organized. All files having the same organizational order is very helper for reviewer. There must be staff present with the authority to access resident/applicant files. All move-out files for the past six months must be available for review. Know the move-out date for all vacant units.

15 Areas of particular concern: Over income limit household at move-in No move-in application or inadequate information No income certification/income not verified No third party verification Student status: ineligible or not properly documented No initial lease

16 Change in household composition within the initial lease term No (or inadequate) re-certifications or questionnaires Late re-certifications (not within 365 days from last certification) Incomplete 3rd party verification without follow up documentation Income/Asset Calculation errors Unaware of Special Needs and/or Service Enriched Housing Priority

17 Physical Inspection The Physical Inspection will encompass a review of the buildings, grounds, community space, work and storage areas, mechanical rooms, laundry and trash areas as well as specified resident dwelling units. MHDC utilizes the Uniform Physical Condition Standards (UPCS) as established by HUD for classifying inspection Findings for the majority of our programs. Additionally- ALL VACANT UNITS will be inspected for Exigent Health and Safety (EH&S) items and occupancy standards.

18 Five inspectable areas required under UPCS 1.Site 2.Building Exterior 3.Building Systems 4.Common Areas 5.Unit Health & Safety UPCS deficiencies are IRS reportable and an 8823 is issued to the Owner *Other areas inspected: all vacant units, fire extinguishers, evidence of fire alarm testing, boiler certificates, elevator certificates, lead based paint, curb appeal, property signage, replacement reserve items, non-compliance items

19 UPCS Findings on the Inspection Report These items are noted under the primary headings and are in bold type Per Section 42 of the IRS code: UPCS Findings affect the property s final inspection rating and are reported to the IRS on Form 8823 Exigent Health and Safety (EH&S) Citations EH&S item are life threatening conditions and must be mitigated within immediately

20 MHDC will notify management of the EH&S items observed during the exit interview and provide a written list of these deficiencies at the end of the inspection Management has 72 hours to submit certification that the EH&S findings have been mitigated (*See Exigent Health and Safety Certification Form)

21 Citations and Observations These items are not reportable under the UPCS; Deficiencies that have been observed that either have not caused a condition deficient enough to require issuance of an 8823 or Deficiencies that may affect the overall appearance or marketability of the property or dwelling unit. Deficiencies are not reported to the IRS but still affect the property s final inspection rating

22 HOME Program Required Forms If there are HOME funds include a HOME split log listing all the HOME set-aside units for the Compliance Officer Lease Minimum one year term unless otherwise agreed upon by resident(s) and Owner (Must include requirements of annual recertification and student requirements-follows Section 8 Student Rule, see Ex. M-1 on the MHDC website) Lease Addendum HOME Addendum Exhibit R

23 Tenant Income Certification Exhibit B Income and Asset verifications Forms: Exhibit C Employment Verification; Exhibit E Certification of Zero Income; Exhibit Q Non- Employment Affidavit Application (Initial and Recertification)

24 Disposal of Assets Declaration Move-In Inspection form and annual inspections Lead-Based Paint Cert. (Pre-1978) HUD H Race Ethnicity Data HUD Exhibit 3-4: The Family Summary Sheet HUD Exhibit 3-5: Declaration Format Form HUD Exhibit 3-6: Verification Consent Form HUD Exhibit 3-7: Owner s Summary of Family HUD 9834 Addendum B Part A VAWA forms Annual Recertifications

25 LIHTC PROGRAM Required Forms Lease Minimum initial 6 month term (Must include requirements of annual recertification and student requirements) Lease should not contain language of a mid term rent increase as they are not allowed Lease Addendum Exhibit O Tenant Income Certification Exhibit B Income Verifications Forms: Exhibit C Employment Verification; Exhibit E Certification of Zero Income; Exhibit Q Non- Employment Affidavit Unit Certification Exhibit I (initial certification only) Under $5,000 Asset Certification Exhibit D Application (Initial and Recertification)

26 Student Eligibility Exhibit M, Exhibit F (if applicable) HUD H Race Ethnicity Data HUD Exhibit 3-4: The Family Summary Sheet HUD Exhibit 3-5: Declaration Format Form HUD Exhibit 3-6: Verification Consent Form HUD Exhibit 3-7: Owner s Summary of Family VAWA forms Move-In Inspection form Lead-Based Paint Cert. (Pre-1978) Exhibit N Annual Re-certification (Complete) Annual Re-certifications beginning with year three (3), Exhibit U (allowed if LIHTC only and no other funding)

27 Exit Interview The Compliance Officer will discuss Findings observed The Compliance Officer will discuss Citations/Observations and review the Corrective Action Requirements for noted items The Compliance Officer explains that the final inspection report is prepared within 30-days of the review and a copy is provided to the management agent

28 C-12 Inspection Report MHDC will issue a final inspection report within 30 days of the exit interview The final report is mailed to the owner and a copy to management A written response to each of the Findings/Citations/Observation must be provided within thirty (30) days of the date of the final inspection report The response should include completed work orders indicating the corrective action taken to mitigate the deficient condition

29 An extension may be approved by MHDC if the request is received within the allotted time frame (within 10 calendar days of report mail out date) All items noted for correction in the final inspection report must be addressed and responded to within the thirty (30) day timeframe regardless of appeal Failure to correct will result in an uncorrected 8823 being issued as applicable

30 When preparing the response, send a cover letter explaining what the response contains. The cover letter should be followed by their response. The response should be sent in the order the deficiencies are listed on the C- 12. Changes in Maintenance Procedures Preventive Maintenance Response Trends That Should Be Corrected (Page 2 of C-12 carried over to Page 3) Deficiencies at the Project Level Deficiencies at the Building Level Deficiencies at the Unit Level (Physical findings and file findings for the each unit vs sending all physical findings for all units, then all file findings for all units)

31 Read the work orders to insure every deficiency was addressed. Review the entire response before sending to insure you haven t missed anything. (This will help reduce the number of C-29 Incomplete Owners Response letters needing to be sent to the properties). If the deficiency is EH&S or a capital item photos should be provided.

32 Extension Request Owner/Management may request an extension within ten (10) calendar days of the date of the report. The extension must be requested via a completed Exhibit T and also must contain a written detailed explanation of extenuating circumstances and back up documentation including names of contractors, bids, etc. An anticipate completion date must also be provided. An extension is not automatic, it must be granted by MHDC; approval is provided via a properly executed Exhibit T. Extension requests are not granted for missing file documentation, COL, or file corrections. For any pending items not completed with in initial 30 day response period or approved extension, update the Compliance Officer on the 10 th of each month until all items are corrected.

33 Appeal Process Owner/Management of properties receiving a Below Average or Unsatisfactory rating may appeal the rating in the following manner: Submit the appeal in writing to MHDC s Director of Asset Management at 505 N. 7th St., 20th Floor, Ste. 2000, St. Louis, Missouri 63101, post marked within 30 days of the date of the review/rating letter The appeal must include all facts desired to be considered in the final review of the inspection rating The Director of Asset Management will review and issue a final determination in writing within 45 days of the date of the appeal submission. The Director s determination is final.

34 Cracks (Parking Lots/Driveways/Roads)

35 Stairs - Broken/Damaged/Missing Steps (Common Areas)

36 Health & Safety Concern-Lock on exterior side prevents egress

37 Erosion/Rutting Areas (Grounds)

38 Faded handicap logo on parking spot sign

39 Ceiling - Bulging/Buckling, Peeling/Needs Paint, Water Stains/Water Damage/Mold/Mildew

40 Faded parking lot striping

41 Damaged/Missing Hardware/Locks (Doors)

42 Missing Covers (Electrical System), Bare wiring and connections are exposed

43 Split or tear in the refrigerator gasket

44 Missing/Broken Cover Plates (Outlets/Switches)

45 Lavatory Sink - Damaged/Missing (Bathroom)

46 Litter (Market Appeal)

47 Litter (Market Appeal)

48 Smoke Detector - Missing/Inoperable

49 Bare lawn areas-needs to be seeded

50 Missing light cover

51 Damaged/missing window, EH&S Broken glass-sharp edges

52 Cabinets - Missing/Damaged (Kitchen)

53 Missing/Damaged/Expired Extinguishers (Fire Protection)

54 Trip Hazard

55 Missing/Damaged Components from Downspout/Gutter (Roofs), Damaged Soffits/Fascia (Roofs)

56 Doors-Damaged Surface-Holes/Paint/Rusting/Glass

57 Damaged/missing blinds, window screen

58 Mailboxes - Missing/Damaged

59 Overgrown/Penetrating Vegetation (Grounds)

60 Leaking Valves/Tanks/Pipes (Hot Water Heater)

61 Damaged Hardware (Doors)

62 Pressure Relief Valve Missing & Rust/Corrosion (Hot Water Heater)

63 Conclusion The Compliance Officers and MHDC appreciate your assistance and cooperation during the compliance review process. Compliance reviews are performed by MHDC to assist owners/management in operating a successful property, to assure a quality environment for residents and to ensure the interest of all parties to the management agreement.

64 Questions?