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IRS Publishes Final Regulations on Utility Allowances

– Changes to Actual Consumption Sub-metering from Renewable Energy Sources On March 4, 2019, the IRS published final regulations to amend the utility allowance requirements for Low-Income Housing Tax Credit (LIHTC) projects. While the final regulations carry forward many of the requirements in the temporary regulations published March 3, 2016, a few of the provisions were modified prior to being adopted in the final regulations. These changes are summarized below. Energy obtained directly from renewable sources – Qualification as a Renewable Energy Source Per 1.42-10 (e)(1)(i), an energy source may qualify as a renewable energy source described in Section 48 or Section 45, even if the building owner does not actually qualify for or receive any credits under Section 48 or Section 45 for the renewable energy source. (See 1.42-10(e)(1)(i)(D)) Temporary Regulations – The text of paragraph 1.42-10(e)(1)(i)(C) in the temporary regulations was unclear as to whether the owner of the energy source had to qualify for, or receive credit for, the energy source in order for the energy source to meet the requirements of the 1.42-10(e)(1)(i). Final Regulations – The final regulations provided clarification by adding paragraph (D) to 1.42-10(e)(1)(i), which states: "Determinations under (e)(1)(i)(C)( 1 ) and ( 2 ) take into account only the man...
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IRS Amends LIHTC Compliance Monitoring Requirements

On February 13, 2019, the IRS approved final regulations to amend the compliance monitoring requirements for Low-Income Housing Tax Credit (LIHTC) projects. The final regulations will be published in the Federal Register on February 26, 2019. Read the final regulations here. While the final regulations carry forward many of the requirements in the temporary regulations published February 25, 2016, a few of the provisions were changed prior to being adopted in the final regulations.  The changes include: Changes to Sample Size – The required minimum sample size for low-income unit and certification inspections is now solely based on the sample size required by the Minimum Unit Sample Size Chart provided in Revenue Procedure 2016-15, referenced as "Table to Paragraph (c)(2)(iii)" in the final regulations. This is the same sample size required by HUD for REAC Inspections. See 1.42-5 (iii)(b). This table uses a scale of 1-27 units based on the size of the property . ​ Previously, under the temporary regulations and through the publication of Revenue Procedure 2016-15, the required sample size for inspection was the lesser of 20% of the low-income units or the number of low-income units reflected in the Minimum Unit Sample Size Chart in the Revenue Procedure. The final regulations removed the 20% component of this rule and inste...
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New US Housing Consultants Compliance Portal

On February 5, 2019, US Housing Consultants released a new private portal site for our File Review/Approval and HAP Processing Clients.  This new portal site replaces our previous portal which was managed through Salesforce's native environment. This new portal is designed for our clients to start new file review cases and upload resident files, add comments, requests, and review past cases. This new portal has more functionality, a modern look and feel, and a design which will allow us to add a lot more features, including reporting, greater security, and billing tracking for our file review/approval service. This new site can be found at https://portal.us-hc.com   Regional and Corporate users can log-in to view all of their properties (assets) with a single login. Up to eight contacts can be assigned to each property Users can add files in one single workflow when adding a case. There is an easy to use search option to quickly search through all previous and current cases. Users will be able to view information about their property, including income limits and other documents that our analysts have stored about the property. For system administration users, we will be adding a view to the portal where you will be able to see orders for each transaction
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1682 Hits

Renowned Compliance Trainer Amanda Gross Joins US Housing Consultants

US Housing Consultants expands its industry leading affordable housing consulting services with the addition of compliance training seminars CONCORD, N.H., January 8, 2019 (Newswire.com) - U.S. Housing Consultants is proud to announce that Amanda Gross has joined their team of dedicated affordable housing consultants and trainers. As of Jan. 8, 2019 Amanda joined U.S. Housing Consultants as the Vice President of Training and Compliance Policy. In her new role, she will bring exciting, new training options for the owners and managers of HUD, Tax Credit, and USDA RD properties. Amanda Gross joins U.S. Housing Consultants with a wealth of knowledge and a reputation as one of the premier trainers in the industry. She has blazed her own path from site management to compliance director and then to an industry leading trainer and consultant. Amanda is regularly a speaker at industry events and works closely with Housing Finance Authorities throughout the country to perform and organize training sessions. She has developed a training style which is engaging and calming, communicating complex topics in a way that makes everyone feel that they too can conquer the challenges in affordable housing compliance. Amanda has a passion for the positive effects affordable housing can have on low-income families. Her training seminars reinforce the...
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New HUD protections for victims of harassment and survivors of domestic violence

  HUD announces new protections for victims of harassment and survivors of domestic violence to go into effect on October 14, 2016. Many municipalities have adopted local nuisance ordinances for the purpose of allowing landlords to evict domestic violence survivors and others who seek police or emergency assistance. Private and public housing providers should make sure that should they choose to evict based on local nuisance ordinances that they are not in violation of the Fair Housing Act. HUD is taking this issue seriously. "On the 22nd anniversary of the Violence Against Women Act, HUD makes it clear that no one should have to choose between calling 9-1-1 and being evicted," said HUD Secretary Julian Castro. "A home should be a sanctuary where everyone can live without the threat of violence or harassment. The actions we take today will work together to protect the housing rights of victims of harassment and survivors of domestic violence." We want to make you aware of HUD's final Harassment Rule titled Quid Pro Quo and Hostile Environment Harassment and Liability for Discriminatory Housing Practices under the Fair Housing Act . The final rule specifies how HUD will evaluate claims of "hostile environment" and "quid pro quo" harassment in both private and publicly-assisted housing. "Hostile environment" sexual harassment...
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Household Composition on HUD and LIHTC

As compliance consultants who review thousands of HUD and LIHTC files, we have put together some frequently asked questions regarding household composition. We are hoping that the following FAQs will provide you with guidance concerning household composition. Household Composition Q. A married couple qualified at the time they moved into their LIHTC unit. They got divorced a year later, and one spouse moved out of the unit. The remaining spouse has a new roommate, and the roommate's income was verified. Their combined income now exceeds the LIHTC income limit but is still below the 140% level. Do they still qualify for the unit? A. Yes. The household was initially qualified, and the change in household composition does not constitute a new household since an original household member is still residing in the unit. We recommend that you re-qualify the entire household at the time of the roommate addition. One reason for doing this is to determine if the roommate would be income eligible if living in the unit by themselves. If the original occupant moves from the unit leaving just the roommate, you could end up with an over income household. If the roommate would not qualify by themselves, you must take additional action. You can still allow the person to move in, but it is critical that your lease agreement clearly states that th...
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Interim Recertifications & New Overtime Rules

What are the processing guidelines when changes are reported? When a tenant requests an interim recertification or when a tenant reports changes in income or other circumstances as required, the owner must take the following steps when processing an interim recertification. Interview the tenant to obtain information on the reported change. The owner must also review and ask if there have been other changes to family composition, income, assets, or allowances since the most recent certification. Obtain third-party verification of the income or other facts reported as changed since the last recertification and maintain documentation in the tenant file The EIV system must be used at the time a tenant reports a change in employment or income to determine if any information has been provided by the employer or if the tenant had unreported income. However, because of the delay in reporting requirements by state agencies, EIV may not contain data that can be used to verify employment or income for use in processing interim recertifications in instances where tenants report a change in employment or income. In these cases, the owner will need to use another method of verification. Input any changes to the tenant's income or other characteristics in the owner's software program and print the HUD-50059 Document the resulting changes in th...
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Interim Recertifications for HUD Section 8 programs

Interim Recertifications for HUD Section 8 programs - Part 1 Determining when an Interim Recertification (IR) is warranted and what effective date to utilize is often challenging. This portion of our three-part series will provide guidance on reporting requirements and optional changes, processing IRs, refusing IRs and the all-important question of what effective date to utilize. This information applies to HUD Project-Based Section 8 properties only, as IR never apply to the LIHTC program What are tenants required to report? All tenants must notify the owner when: A family member moves out of the unit; The family proposes to move a new member into the unit; NOTE: At a minimum, owners must apply screening criteria for drug abuse and other criminal activity, *including State sex offender registration, and use of the EIV Existing Tenant Search to persons proposed to be added to the household, including live-in aides. The owner must make sure that the person also discloses and provides verification of his or her SSN. An adult member of the family who was reported as unemployed on the most recent certification or recertification obtains employment; or The family's income cumulatively increases by $200 or more per month. What are optional reporting requirements? Tenants may request an IR due to any changes occurring since the last re...
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HUD Final Rule - Streamlining Administrative Regulations

On March 8, 2016, HUD published a Final Rule on Streamlining Administrative Regulations The effective date of the Final Rule is April 7, 2016. Portions of this final rule affect the Public Housing (PH) Program, the Housing Choice Voucher (HCV) program, the Community Planning and Development (CPD) Programs and the following Multi Family Housing Programs: Project-Based Section 8 (New Construction, State Agency-Financed, Substantial Rehabilitation, Rural Housing Services, Loan Management Set-Aside and Property Disposition Set-Aside) Section 8 Moderate Rehabilitation Rent Supplement Program Section 202 Supportive Housing for the Elderly (including Project Assistance Contract and Project Rental Assistance Contract (PRAC) Section 811 Supportive Housing for Persons with Disabilities (including PRAC and Project Rental Assistance) Section 236 Interest Reduction Payments Program Rental Assistance Payment (RAP) Program Sections 221(d)(3) and (d)(5) – FHA Insurance Programs for New Construction or Substantially Rehabilitated Multifamily Rental Housing We encourage you to review the regulations . US Housing Consultants will provide more detailed articles as information becomes available.  
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Handling 401(k) Accounts on Tax Credit Programs

401(k) Accounts in HUD Sec 8 and LIHTC programs Do you know the answers to these questions? If a 401(k) account is only accessible if a hardship is proven, should the asset be considered when determining eligibility for a HUD or LIHTC household? Does investment income based on market fluctuations need to be reflected as income on the asset? Are withdrawals from a 401(k) account considered income? This article will assist in answering some of the common 401(k) questions as it relates to the affordable housing industry, specifically HUD Section 8 and Low Income Housing Tax Credits. What is a 401(k) account? A 401(k) is a retirement savings plan sponsored by an employer. It lets workers save and invest a piece of their paycheck before any deductions. Taxes aren't paid until the money is withdrawn from the account. How are 401(k) accounts verified? A 401(k) must be verified directly with the employer or plan administrator. In the affordable housing world, the cash value of assets needs to be reflected on the certification. Therefore, verification of the market value along with verification of costs to convert the asset into cash (taxes/penalties) is necessary. It is also necessary to verify interest/dividends and whether the applicant/tenant is receiving periodic payments. Is the 401(k) account income or an asset? If an applicant/te...
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2440 Hits

Student Restrictions: HUD vs. LIHTC vs. HOME

  US Housing Consultants receives numerous inquiries regarding student status and proper documentation of applicant/tenant files to ensure compliance. This article applies to properties with HUD Section 8, Low-Income Housing Tax Credit (LIHTC) and/or HOME funding. Confirming student status requirements are met is a critical piece in determining eligibility. Applying student rules based on funding can be challenging, especially when properties have multiple funding sources in which an applicant/tenant may need to meet separate student-related rules in order to qualify. Here are some guidelines that we hope will be helpful when determining eligibility for a household with a student(s). Why are there student restrictions in affordable housing? For LIHTC… The LIHTC student restrictions were primarily implemented to prevent dormitory and/or transient housing. For HUD… The HUD student restrictions were primarily implemented for two reasons: To address incidents of children of wealthy parents receiving federal housing assistance; and To address incidents of college students obtaining federal housing assistance without their educational financial assistance counted as income for purposes of income eligibility for federal housing assistance. For HOME… In 2013, HUD revised regulations governing the HOME program and decided that HOME ...
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Social Security Income Guidance for HUD & LIHTC

Social Security Income Guidance for Applicants at HUD & LIHTC Properties Has any of you been challenged with the verification and calculation of Social Security (SS) or Supplemental Security Income (SSI) when working with an applicant or tenant who collects or might be entitled to collect these benefits? You would think that this type of income would be easy to verify and calculate, but some of you may be surprised with this month's article that there are challenges when dealing with this type of income for HUD, LIHTC or a combination of both. Verification of SSA Benefits Years ago, the Social Security Administration (SSA) announced it would stop providing Property Managers third party verifications. As a result, Property Managers have to rely on documentation provided by applicants to verify SS and SSI income to determine income eligibility and/or tenant rent. Annual award letters provided by an applicant can be utilized to verify gross Social Security benefits for the applicable year. For example, the award letter recipients received in 2014 stating 2015 benefits can be utilized for certifications effective in 2015. SSA letters are good for the full year because they are not dated and they are provided after a COLA or no COLA has been announced. If an SSA letter is dated, it is likely due to a change in benefits. SSI verif...
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1664 Hits

Employment Guidance for HUD and LIHTC Properties

Have you ever noticed that 3rd party Verification of Employment (VOE) forms and paycheck stubs don't always match? What if your applicants don't have 4-6 recent paycheck stubs? It is difficult to determine the best reasonable approach for calculating anticipated income when the information provided to you is insufficient. HUD Section 8 LIHTC HUD Section 8 layered with LIHTC We will provide guidance on what to look for when determining initial (move-in) eligibility based on verifications of employment (VOEs) and paycheck stubs. Ultimately, your files need to be well documented to support your income calculations, ensuring proper rent calculation for HUD as well as income eligibility for both the HUD and LIHTC programs. Remember, owners/agents (O/A) need to use the best reasonable approach to calculating anticipated income. Obtaining the best documentation will assist you with this task. For HUD Section 8 properties, paycheck stubs and Verification of Employment forms received directly from the employer are acceptable as third-party verification if the following criteria are met: The document is dated within 120 days of receipt by owner/agent; An unaltered original is provided; The documentation was complete; and The document is current (for example, documentation of public assistance may be inaccurate if it is not recent and does...
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Working with Self-Employment Income

Of the all the income sources that need to be verified for affordable housing programs, self-employment income has to be one of the most challenging. There are so many factors to consider when determining income for those who are self-employed: Is the person self-employed? Is this new business or existing business? Did they file a tax return? Forms certifying to self-employment can be confusing for the applicant/tenant. It is important for management to have a thorough understanding of the forms they are required to use and the supporting documentation being requested. Required documentation to support self-employment income varies widely and while the following are general guidelines, a review of your state specific requirements is recommended. Types of Self-Employment The first step is to determine just what sort of "self-employed" the household member is. Generally, self-employment household members are either: Owners of businesses Sub-Contractors who are paid by an employer with a 1099 There are times when the individual is not sure if they are considered self-employed. Processing third party verification and additional clarification will assist in understanding if the applicant/tenant is self-employed or an independent contractor. Household Employees vs Self-Employment According to the IRS, applicants/tenants are considered...
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3968 Hits

Handling Issues with EIV Discrepancies

How to Handle the Complex World of EIV Discrepancies... In 2001, the President's Management Agenda was released and established the reduction of erroneous payments as a key government-wide priority and required government agencies to measure improper payments annually, develop improvement targets and corrective actions and track results. Based on a HUD study, it was estimated that 3.2 billion dollars (yes, billion!!) of improper payments were being paid out on an annual basis. As a result of this and the President's Management Agenda, HUD established a Rental Housing Integrity Improvement Project, otherwise known as the RHIIP initiative. The goal of the initiative was to address the causes of errors and improper payments and to ensure "the right benefits go to the right persons." To assist in meeting RHIIP's goals, HUD developed and began implementation of the UIV (Upfront Income Verification) which is now known as the Enterprise Income Verification (EIV) system. In the first four years of EIV's implementation, there was a 60% reduction in gross improper payments. Bottom line: EIV is an effective tool and the system has eliminated a huge amount of improper payments. A critical piece of EIV that assists with reducing improper payments is the EIV Income Discrepancy Report. Knowing how to resolve and properly document the tenant fi...
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How to Handle Willful False Statements on Tenant Certifications

Section 1001 of Title 18 of the US Code makes it a criminal offense to make willful false statements or misrepresentations to any Department or Agency of the United States as to any matter within its jurisdiction. Did that get your attention? The determination of "willful" is often a gray area. Was a long-forgotten Christmas Club account not disclosed? Did an applicant make an innocent mistake? Was a long-forgotten Christmas Club account not disclosed? Or was there a deliberate intention to misrepresent circumstances? Did a management representative try and "help" an employer by completing a Verification of Employment, requesting only a signature? Or was an employer signature obtained on a blank form and a manager completed with information that would qualify the household? It happens. Fortunately there are some protections offered if management discovers reports and corrects incidences of fraud. The 8823 Guide states, "The Low-Income Housing Program will not consider there to have been reportable noncompliance if tenant fraud is discovered and addressed by the owner prior to a state agency review or an IRS audit, and the owner satisfies the state agency that: The tenant provided false information; The owner did everything a prudent person would do to avoid fraudulent tenants (due diligence) and has implemented any needed change...
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LIHTC Physical Issue Correction Periods

Clarification on rules regarding LIHTC recapture and penalties Last week in the IRS's LIHTC Newsletter, there was a reminder about non-compliance correction periods, and as a result, we received a number of questions about how this could impact our clients. The newsletter ( LIHTC Newsletter # 55 ) clarified that while many Housing Finance Authorities provide a period of time for repairs to be completed after a physical inspection, that this period is not exempt from recapture or other tax consequences. When your low income housing tax credit property receives it's tri-annual physical inspection, the HFA is required to submit an 8823 for all noted physical non-compliance (as well as rent and issues with the low income certifications) observed during the inspection. Before the submission of the 8823, the property is provided with an opportunity to complete the repairs; the correction period cannot exceed 90 days from the date of the notice provided to the property. In certain circumstances, an agency may extend the correction period to a total of six months, if warranted. However, it is important to remember that any correction period is not a "grace-period" that allows the property to escape recapture or other consequences. It is also important to remember that unlike REAC Inspections, LIHTC inspections using the UPCS Inspection ...
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SSN Requirements HUD vs LIHTC

SSN Requirements in HUD vs. LIHTC Lately, we have had a lot of questions from our Certification Approval clients about the requirements of Social Security Number disclosure on LIHTC vs. HUD programs. The most complex part of performing Move In File Audits on multiple funding programs is helping our clients to understand why the same family is eligible at one property and not at another. We worked with a customer recently whose property is a Project Based Section 8 HUD property with 100% LIHTC. The family, we'll call her "Ms. Jones", has applied to live at the property. Ms. Jones is not an eligible citizen of the US and does not contend eligible immigration status, and she has an infant with legal immigration status (a baby) who has not yet been issued a Social Security number (SSN). She also has two older children who do have SSNs and are legal immigrants. This family would not be eligible due to the HUD Section 8 requirements for SSN Disclosure, but if it was just an LIHTC property, there is no requirement for SSN disclosure. For this scenario, Ms. Jones herself is eligible because she is not contending eligible immigration status and there are other members of the household who are eligible citizens. The baby who doesn't have a SSN is the problem; the lack of SSN would make the entire family ineligible for the subsidy. HUD Not...
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Latest Blogs

16 July 2019
REAC Inspections
July 8, 2019 HUD's Office of Multifamily Housing Asset Management and Oversight released a memorandum reiterating the rules surrounding notice prior to entering resident's units, availability of documentation for residents to review, and clarificati...
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On May 1, 2019, HUD Released a memorandum entitled "What to do when a Project Receives a Zero as a Result of an Owner Refusing to Allow HUD to Inspect." The notice clarifies a few areas:If a property fails to complete an inspection after the initial...

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