LIHTC and HOME 11/25/2014. About Your Instructor. Jo Johnson Ikelheimer NCHM Director of LIHTC Compliance. Mission Statement

Transcription

1 and Presented by The National Center for Housing Management All Rights Reserved 1 About Your Instructor Jo Johnson Ikelheimer NCHM Director of Compliance 2 Mission Statement NCHM s mission is to provide objective and independent leadership at the national level in helping meet the Nation s housing management and training needs Executive Order

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3 7 8 Disclaimers NCHM does not provide legal advice NCHM does not set policy for your owner, management company, or organization. 9 3

4 In Case of Technical Difficulties If you cannot hear the audio portion of the presentation via internet, your instructor will be broadcasting the presentation over the telephone as well The telephone number and access code to hear the presentation appears on this screen and is also included in your confirmation If technical difficulties occur during the presentation, please dial into the phone conference! 10 Objectives At the conclusion of this webinar you should know: The basic program mechanics of and The specifics of eligibility between and and how to qualify applicants for both How to manage ongoing eligibility and compliance for and when blended

5 Basic Program Mechanics and 13 Program Design Created by Congress in 1986 to encourage private investment in constructing and rehabilitating affordable housing in exchange for a 10-year credit against tax liability Initial compliance period for 15 years Extended use period of affordability for a minimum of additional 15 years 14 Program Design initially funded by HUD in 1992 Designed to increase the supply of affordable housing for a sustainable period by capping rents at affordable levels and restricting occupancy to Low and Very-Low households Affordability period depends upon amount of funding and ranges from 5 to 20 years 15 5

6 Program Administrators IRS Internal Revenue Service HUD Housing & Urban Development State Housing Finance Agencies Owners/Investors Managers Residents Participating Jurisdictions (state/local) Owners Managers Residents 16 and Financing Financing Funded with grants or loans as federal contribution Tax credit investment as federal contribution Bills monthly for HAP 17 and Eligibility Tenant Eligibility Program eligibility Income qualified Student household qualified Project eligibility Occupancy restrictions Unit size restrictions Tenant selection criteria 18 6

7 and Eligibility (cont) Unit Eligibility Suitable for occupancy Rent restricted Non-transient rental agreement Project Eligibility Meeting and maintaining the minimum setaside Meeting and maintaining the high/low and fixed/floating status requirements 19 Key Documents Document Qualified Allocation Plan Application Extended Use Agreement IRS Form 8609 IRS Form 8823 Purpose Defines application criteria Blueprint for property s defining characteristics Deed restriction locking in income targeting and length of affordability Allocates tax credits and enables them to be claimed Used for reporting noncompliance to the IRS 20 Key Documents Document Written Agreement a.k.a. Regulatory Agreement Management Plan and Performance Goals Extended Use Agreement Purpose Executed by PJs and Owners; Regulates funding activity and program compliance Optional requirement to ensure fiscal objectives and compliance objectives Deed restriction locking in income targeting and length of affordability 21 7

8 and Regulations Regulations Guidance Section 42 of Internal Revenue Code IRS Guide for Completing Form 8823 HUD Handbook REV-1 24 Code of Federal Regulations (CFR) Part 92 Model Program Guides HUD Handbook REV-1 22 The Blended Challenge When program regulations conflict, comply with the regulation that is most restrictive 23 2 The Blended Challenge When program regulations don t align, comply with both sets of regulations

9 The Blended Challenge: Examples and HCV Rents OR and HCV Rents Student Restrictions AND Student Restrictions 25 2 Eligibility Specifics and 26 Definition of Income uses Section 8/Part 5 definition of income may use: Section 8/Part 5 definition of income, or IRS definition of adjusted gross income as defined for IRS Form 1040 HUD indicates owners/managers should request that PJs permit them to use Section 8/Part 5 definition for consistency when blended 27 9

10 Income Limits Income limits come from HUD Multi-family MTSP limits published/effective for 2015 on 3/6/15 Unborn children included in household member count Income limits come from HUD CPD Limits published/effective for 2015 on 6/1/2015 Unborn children are not counted in household member count* 28 Qualifying Set-Asides as published for Multifamily Tax Subsidy Projects (MTSP) 50% AMI 60% AMI limits are held harmless per HERA as published for Program Income Limits 50% AMI (Very Low); Qualifying income for Low Rent Units 80% AMI (Low); Qualifying income for High Rent Units limits are not held harmless 29 Blended Income Qualification Anchorage, AK Median Family Income $87,800 $84,900 4-person household VLI Standard 50% $43,900 $42,450 HERA Special 50% $44,450 $44,450 What is the applicable 2014 income limit for a blended unit? 30 10

11 Student Qualification Student eligibility restrictions UNLESS one of five exceptions is met, households consisting entirely of full-time students are NEVER eligible for tax credit units Student status can change from year to year, and a household may become ineligible at any time in their tenancy, even though they were initially eligible at application 31 Student Qualification Adopts Section 8 Housing Choice Voucher program restrictions on student participation found at 24 CFR Effective for all funding commitments made before or after publication of 2013 Final Rule 32 Student Qualification (cont) Excludes any student enrolled in a higher education institution and under the age of 24 unless: Veteran of U.S. military Married Has a dependent child(ren) Person with disabilities Individually eligible Parents who are eligible based on income 33 11

12 Blended Student Qualification Bennett Family Name Age Status Samantha Bennett 23 F/T Student Samuel Bennett 5 F/T Student Jenna Bennett 5 F/T Student Would they meet Student Restrictions? Would they meet Section 42 Student Restrictions? Yes Yes 34 Setting Rent Tax Credit Units must be Rent Restricted Owners may not set Rents that exceed the Gross Rent Limit Contract Rent + Utility Allowance + Non-optional Fees Rent limits are based exclusively on bedroom size in relation to Area Median Income Rent limits are also held harmless due to HERA When blended with rental assistance, gross rent limit doesn t apply 35 Setting Rent Units must be Rent Restricted Owners may not set Rents that exceed the Gross Rent Limit Contract Rent + Utility Allowance + Non-optional Fees Rent limits are published by HUD in conjunction with income limits Rent limits are not Held Harmless When blended with tenant-based rental assistance, total contribution is capped at rent limit 36 12

13 Blended Rent Choices Anchorage, AK Rent Limits blended with 2 bedroom unit 50% Low Rent $988 80% High Rent $1,146 50% Standard $988 2 bedroom unit 60% Standard $1,186 50% HERA Special $1,001 60% HERA Special $1,201 What is the applicable rent for these units? 37 Please use the chat pod now to submit questions to your presenter. 38 Ongoing Eligibility and 39 13

14 Tenant Certification Annual Income Certification Student Certification Interim Certification 100% Mixed-Use EIV may not be used for verifications 40 Tenant Certification Annual Income Certification Student Certification Interim Certification 100% Mixed-Use EIV may not be used for or verifications 41 Annual Recertification: Key Issues Disabled tenant Previously unemployed Reports increase from employment income, or participation in self-sufficiency program All income earned by disabled tenant is excluded Half of income earned by disabled tenant is excluded Applies regardless of the definition of annual income 42 14

15 Annual Recertification Key Issues Disabled Tenant Tenant reports unemployed At annual recertification, tenant reports income of $10,000 Count $0 in employment income Count $5,000 in employment income 43 Over Income at Recertification assisted is over-income when tenant income exceeds either 50% or 80% limit is over-income when tenant income exceeds 140% of current applicable limit / units governed by program rent requirements, so tenant rent doesn t follow same rules for OI Fixes for OI dependent on High/Low and Fixed/Floating unit status 44 4 Record Retention 5 years 6 years Special consideration for first year records Special consideration of project development records 45 15

16 Compliance Monitoring Monitoring compliance is the responsibility of State Housing Agencies First audit within 2 years of last building placed in service and then every 3 years (minimum) Minimum 20% tenant file audit Physical inspections (Using Local Codes, or HUD s Uniform Physical Condition Standards (UPCS)) 46 Compliance Monitoring Frequency of Compliance Monitoring by PJ based on total number of units at property # of Units Frequency of Compliance Monitoring 1-4 Every 3 years 5-25 Every 2 years 26 or more Every year PJ monitors for three requirements: Compliance with regulations Overall financial performance/viability Physical condition of the property and units 47 Fair Housing When is blended with, the following regulations/laws should be studied and applied: Section 504 of the Rehabilitation Act of 1973 (24 CFR Part 8) [Only applies to ] Fair Housing Act as amended in 1988 (24 CFR Part 100 et seq) Americans with Disabilities Act 48 16

17 Please use the chat pod now to submit questions to your presenter. 49 Thank You Thank You! 50 17