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COVID-19 | Federal Housing Guidance – HUD, HOME & LIHTC Updates 4/17/20

This week provided the affordable housing industry with an onslaught of new guidance regarding HUD, LIHTC, and HOME housing programs.  Here is a summary of the updates for each program.

HUD Provides Guidance on the treatment of Stimulus Payments and Pandemic Unemployment Insurance

In an update to HUD’s COVID-19 Q&A document,  HUD has provided the answer to the question everyone has been asking regarding the treatment of stimulus payments and the $600 federal unemployment insurance enhancement under the CARES act. These payments are EXCLUDED when determining a household’s annual income.

Multifamily Housing

Q4: Are household payments under the CARES Act reportable as tenant income?

A: Household stimulus payments of up to $1,200 (which is technically an advance tax credit) and the temporary $600 per week federal enhancement to unemployment insurance provided by the CARES Act are not to be included in calculations of income. However, HUD notes that regular payments of unemployment insurance (issued by the state) are treated as income, as is customary under program rules.

HOME Investment Partnership Program

HUD has been busy this week as they also published a memorandum, titled ” Availability of Waivers and Suspensions of the HOME Program
Requirements in Response to COVID -19 Pandemic”

The purpose of the memo is to provide guidance to Participating Jurisdictions (PJs) affected by the  COVID-19  pandemic and to establish statutory suspensions and regulatory waivers needed to enable  PJs to use HOME funds to address immediate housing needs and to help prevent the spread of the virus. HUD’s memo is broken down into two sections. Section I is specific to PJs who are located in areas covered by a major disaster declaration made under Title IV of the Stafford Act, and Section II provides the regulatory waivers available to all HOME PJs, not just those included in a major disaster declaration.

Section I: (Only applies to PJs in areas covered by a major disaster declaration) 

  •  10% Administration and Planning Cap (Increased to 25%)
  •  15% CHDO Set-aside Requirement (Decreased to 0%)
  •  Operating Expense Assistance Limitation (Increased from 5% to 10%) and Conditions (a CHDO may now receive funding to fill operating budget shortfalls, even if the amount exceeds the higher of $50,000 or 50% of its annual operating budget)
  • Reduced the matching requirement for PJs in areas covered by a major disaster declaration by 100 percent for FY 2020 and FY 2021

Section II (Applies to all PJs)

  • Citizen Participation Reasonable Notice and Opportunity to Comment Waiver – Allows PJs to amend their plans as a result of the COVID-19 pandemic to reduce the comment period to 5 days.
  • Income Documentation Waiver – permits the PJ to use self-certification of income, as provided in lieu of source documentation to determine eligibility for the HOME program. This waiver remains in effect through December 31, 2020. The  PJ must arrange to conduct on-site rent and income reviews within 90 days after the waiver period.
  • On-Site Inspections of HOME-assisted Rental Housing Wavier –  This waiver extends the timeframe for PJs to perform on-going periodic inspections and on-site reviews. The waiver is in effect through December 31, 2020, Within 120 days of the end of this waiver period, PJs must physically inspect units that would have been subject to on-going inspections during the waiver period.  NOTE: The waiver is applicable to ongoing periodic inspections and does not waive the requirement to perform initial inspections of rental properties upon completion of construction or rehabilitation.
  • Annual Inspection of Units Occupied by Recipients of HOME Tenant-Based Rental Assistance (TBRA) Waiver
  • Four-Year Project Completion Requirement Waiver – This waiver applies to projects for which the 4-year project completion deadline will occur on or after the date of this memorandum. The completion deadlines for covered projects are extended to December 31, 2020.
  • Nine-Month Deadline for Sale of Homebuyer Units Waiver
  • Timeframe for a Participating Jurisdiction’s Response to Findings of Noncompliance Waiver – The waiver applies to all findings of HOME regulatory noncompliance issued from the date of this memorandum through December 31, 2020. In
    the notice of findings, HUD will specify a time period for the PJ’s response based on the nature of the noncompliance and required corrective action(s). HUD may also, upon request by the PJ, extend time periods imposed before the date of this memorandum.

LIHTC COVID-19 GuidanceLIHTC Housing

IRS issued Notice  2020-23 which provides additional relief for taxpayers affected by COVID-19.  Notice 2020-23 provides extensions to deadlines required for certain LIHTC actions that are outlined in Rev. Proc. 2018-58.

In our previous blog on this topic, we detailed the list of issues outlined by NCSHA that was submitted to the IRS.  While Notice 2020-23 does not address all the issues noted by NCSHA, the notice does extend certain deadlines for 3 of the issues identified in NCSHA’s letter, which are the first three items listed below.  In addition to the first three items, the notice also extends the deadlines for additional actions.

Owner/Agents have until July 15, 2020, to meet any of the deadlines below if they were originally required to be completed on or after April 1, 2020, and before July 15, 2020.

  1. 10% Test deadline for carryover allocations
  2. 24-month minimum rehabilitation expenditure deadline.
  3. Annual Income Recertification requirements
  4. The annual owner certification of continued compliance
  5. 10-year rule for claiming credits on an existing building
  6. The minimum set-aside requirement
  7. The requirement that a low-income housing commitment must be in effect as of the beginning of the year for a building to receive credit

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