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HUD HOTMA Rules Clarify and Change the Treatment of Assets

Introduction HUD Notice H 2013-10 expands upon the Final Rule for implementing the Housing Opportunity Through Modernization Act (HOTMA). This final rule makes some changes to the way managers of HUD-assisted housing will deal with assets on HUD-assisted properties. Since LIHTC properties are required to follow HUD rules relative to the determination of income, these changes also apply to tax credit properties. Net family assets are defined as the net cash value of all assets owned by the family, after deducting reasonable costs that would be incurred in disposing of real property, savings, stocks, bonds, and other forms of investment, except as excluded by regulation. Assets with Negative Equity While assets with negative equity are still considered assets, the cash value of real property or other assets with negative equity are considered to have zero value for purposes of calculating net family assets. Negative numbers are never used in the calculation of asset value. Assets Owned by a Business Entity If a business entity (e.g., LLC or LP) owns an asset, then the family s asset is their ownership stake in the business. The actual assets of the business are not counted as family assets. However, if the family holds the assets in their name (e.g., they own 1/3 of a restaurant) rather than in the name of the business entity, then the percentage value of the asset owned by the family is what is counted toward the net family assets (e.g., one-third of the value of the restaurant). Jointly Owned Assets For assets jointly owned by the family and one or more individuals outside of the assisted family, owners must include the total value of the asset in the determination of net family assets, unless the asset is otherwise excluded, or unless the assisted family can demonstrate that the asset is inaccessible to them, or that they cannot dispose of any portion of the asset without the consent of another owner who refuses to comply. If the family demonstrates that they can only access a portion of an asset, then only that portion s value shall be included in the calculation of net family assets. Exclusions from Assets Required exclusions from net family assets include the following: The value of necessary items of personal property; The value of all non-necessary items of personal property with a total combined value of $50,000 or less, annually adjusted for inflation; The value of any retirement plan recognized by the IRS, including IRAs, employer retirement plans, and retirement plans for self-employed individuals; The value of real property that the family does not have the effective legal authority to sell. Examples of this include (1) co-ownership situations {including situations where one owner is a victim of domestic violence} where one party cannot unilaterally sell the property, (2) property that is tied up in litigation, and (3) inherited property in dispute; The value of any education savings account under Section 530 of the IRC 1986, the value of any qualified tuition program under Section 529 of the IRC, and the contributions to and distributions from any Achieving a Better Life Experience (ABLE) account authorized under Section 529A of the IRC; The value of any "baby bond" account created, authorized, or funded by the federal, state, or local government (money held in trust by the government for children until they are adults); Interests in Indian trust land; Equity in a manufactured home where the family receives assistance under the Housing Choice Voucher Program; Equity in a property under the Homeownership Option where the family receives assistance under the Housing Choice Voucher Program; Family Self-Sufficiency accounts; Federal or state tax refunds or refundable tax credits for 12 months after receipt by the family; The full amount of assets held in an irrevocable trust; and The full amount of assets held in a revocable trust where a member of the family is the beneficiary, but the grantor and trustee of the trust is not a member of the family. Necessary & Non-Necessary Personal Property Necessary personal property is excluded from assets. Non-necessary personal property with a combined value of more than $50,000 (adjusted by inflation) is an asset. When the combined value of non-necessary personal property does not exceed $50,000, it is excluded from assets. All assets are categorized as either real property (e.g., land, a home) or personal property. Personal property includes tangible items, like boats, as well as intangible items, like bank accounts. For example, a family could have non-necessary personal property with a combined value that does not exceed $50,000 but also own real property such as a parcel of land. While the non-necessary personal property would be excluded from assets, the real property would be included - regardless of its value, unless it meets a specific exclusion. Necessary personal property are items essential to the family for the maintenance, use, and occupancy of the premises as a home; or they are necessary for employment, education, or health and wellness. Necessary personal property includes more than mere items that are indispensable to the bare existence of the family. It may include personal effects (such as items that are ordinarily worn or used by the individual), items that are convenient or useful to a reasonable existence, and items that support and facilitate daily life within the family s home. Necessary personal property does not include bank accounts, other financial investments, or luxury items. Determining what is a necessary item of personal property is very fact-specific and will require a case-by-case analysis. Following are examples of necessary and non-necessary personal property (not an exhaustive list). Necessary Personal Property Vehicles used for personal or business transportation; Furniture and appliances; Common electronics such as TV, radio, DVD players, gaming systems; Clothing; Personal effects that are not luxury items (e.g., toys and books); Wedding & Engagement rings; Jewelry used in religious or cultural celebrations or ceremonies; Medical equipment & supplies; Musical instruments used by the family; Personal computers, tablets, phones, and related equipment; Educational materials; and Exercise Equipment Non-Necessary Personal Property RVs not needed for day-to-day transportation, including motor homes, campers, and all-terrain vehicles; Bank accounts or other financial investments (e.g., checking/savings account, stocks/bonds); Recreational boats or watercraft; Expensive jewelry without cultural or religious significance or which has no family significance; Collectibles, such as coins or stamps; Equipment/machinery that is not part of an active business; and Items such as gems, precious metals, antique cars, artwork, etc. Trusts Any trust (both revocable and non-revocable) that is not under the control of the family is excluded from assets. For a revocable trust to be excluded from net family assets, no family or household member may be the account s trustee. A revocable trust that is under the control of the family or household (e.g., the grantor is a member of the assisted family or household) is included in net family assets, and, therefore, income earned on the trust is included in the family s income from assets. This also means that PHAs/MFH Owners will calculate imputed income on the revocable trust if net family assets are more than $50,000, as adjusted by inflation, and actual income from the trust cannot be calculated (e.g. if the trust is comprised of farmland that is not in use). Actual Income from a Trust If the Owner determines that a revocable trust is included in the calculation of net family assets, then the actual income earned by the revocable trust is also included in the family s income. Where an irrevocable trust is excluded from net family assets, the Owner must not consider actual income earned by the trust (e.g., interest earned, rental income if the property is held in the trust) for so long as the income from the trust is not distributed. Trust Distributions & Annual Income A revocable trust is considered part of net family assets: If the value of the trust is considered part of the family s net assets, then distributions from the trust are not considered income to the family. Revocable or irrevocable trust not considered part of net family assets: If the value of the trust is not considered part of the family s net assets, then distributions from the trust are treated as follows: (1) All distributions from the trust s principal are excluded from income. (2) Distributions of income earned by the trust (i.e., interest, dividends, realized gains, or other earnings on the trust s principal), are included as income unless the distribution is used to pay for the health and medical expenses for a minor. Actual & Imputed Income from Assets The actual income from assets is always included in a family s annual income, regardless of the total value of net family assets or whether the asset itself is included or excluded from net family assets unless that income is specifically excluded. Income or returns from assets are generally considered to be interest, dividend payments, and other actual income earned on the asset, and not the increase in market value of the asset. Imputed income from assets is no longer determined based on the greater of actual or imputed income from the assets. Instead, imputed asset income must be calculated for specific assets when three conditions are met: (1) The value of net family assets exceeds $50,000 (as adjusted for inflation); (2) The specific asset is included in net family assets; and (3) Actual asset income cannot be calculated for the specific asset. Imputed asset income is calculated by multiplying the net cash value of the asset, after deducting reasonable costs that would be incurred in disposing of the asset, by the HUD-published passbook rate. If the actual income from assets can be computed for some assets but not all assets, then PHAs/MFH Owners must add up the actual income from the assets, where actual income can be calculated, then calculate the imputed income for the assets where actual income could not be calculated. After the PHA/MFH owner has calculated both the actual income and imputed income, the housing provider must combine both amounts to account for income on net family assets with a combined value of over $50,000. When the family s net family assets do not exceed $50,000 (as adjusted for inflation), imputed income is not calculated. Imputed asset income is never calculated on assets that are excluded from net family assets. When actual income for an asset which can equal $0 can be calculated, imputed income is not calculated for that asset. Owners should not conflate an asset with an actual return of $0 with an asset for which an actual return cannot be computed, such as could be the case for some non-financial assets that are items of nonnecessary personal property. If the asset is a financial asset and there is no income generated (for example, a bank account with a 0 percent interest rate or a stock that does not issue cash dividends), then the asset generates zero actual asset income, and imputed income is not calculated. When a stock issues dividends in some years but not others (e.g., due to market performance), the dividend is counted as the actual return when it is issued, and when no dividend is issued, the actual return is $0. When the stock never issues dividends, the actual return is consistently $0. Self-Certification of Net Family Assets Equal to or Less Than $50,000 Owners may determine net family assets based on a self-certification by the family that the family s total assets are equal to or less than $50,000, adjusted annually for inflation, without taking additional steps to verify the accuracy of the declaration at admission and/or reexamination. Owners are not required to obtain third-party verification of assets if they accept the family s self-certification of net family assets. When Owners accept self-certification of net family assets at reexamination, the Owner must fully verify the family s assets every three years. Owners may follow a pattern of relying on self-certification for two years in a row and fully verifying assets in the third year. The family s self-certification must state the amount of income the family anticipates receiving from such assets. The actual income declared by the family must be included in the family s income unless specifically excluded from income under HUD regulations. Owners must clarify, during the self-certification process, which assets are included/excluded from net family assets. Owners may combine the self-certification of net family assets and questions inquiring about a family s present ownership interest in any real property into one form. Bottom Line Owners and managers of properties that are subject to HOTMA should familiarize themselves with these new asset rules and ensure they are in place. HUD properties will be required to implement the rules when they put the HOTMA changes into effect in 2024. LIHTC properties should consult the appropriate HFA to determine when the new rules must be followed.

A. J. Johnson Partnering with Mid-Atlantic AHMA for March 2024 Affordable Housing Training

During March 2024, A. J. Johnson will be partnering with the MidAtlantic Affordable Housing Management Association for five live webinar training sessions intended for real estate professionals, particularly those in the affordable multifamily housing field. The following sessions will be presented: March 12: Intermediate LIHTC Compliance - Designed for more experienced managers, supervisory personnel, investment asset managers, and compliance specialists, this program expands on the information covered in the Basics of Tax Credit Site Management. A more in-depth discussion of income verification issues is included as well as a discussion of minimum set-aside issues (including the Average Income Minimum Set-Aside), optional fees, and use of common areas. The Available Unit Rule is covered in great detail, as are the requirements for units occupied by students. Attendees will also learn the requirements relating to setting rents at a tax-credit property. This course includes the recent HOTMA changes and contains some practice problems but is more discussion-oriented than the Basic course. A calculator is required for this course. March 19: Two separate webinars will be offered on this date. An Overview of the HOME Program with HOTMA Changes will be offered in the morning. This three-hour course outlines the basic requirements of the HOME Investment Partnership Program, with particular emphasis on combining HOME funds with the federal Low-Income Housing Tax Credit. The training provides an overview of HOME Program regulations, including rent rules, unit designations, income restrictions, and recertification requirements. The course also includes the recent HOTMA changes that impact the HOME program.  The course concludes with a detailed discussion of combining HOME and tax credits, focusing on occupancy requirements and rents, tenant eligibility differences, handling over-income residents, and monitoring requirements. March 19: The afternoon session will be Management of Rural Development Section 515 Layered Deals. The development of affordable rental housing is a complex undertaking that often requires a combination of programs to succeed. While the foundation of most affordable rental housing today is the Low-Income Housing Tax Credit Program, the tax credits alone are often not enough to ensure project feasibility. Successful properties often must "layer" programs to work. One such program is the Rural Development Section 515 program. When combining other programs with a Section 515 project, management must understand the rules of all, and be able to implement them at the project level. This three-hour session will cover some of the most common pitfalls when managing Section 515 layered properties and guide the knowledge required to be successful. Questions and discussions will be encouraged, and attendees will be able to ask specific questions about the issues facing their properties. March 20: Advanced LIHTC Compliance - This full-day training is intended for senior management staff, developers, corporate finance officers, and others involved in decision-making concerning how LIHTC deals are structured. This training covers complex issues such as eligible and qualified basis, applicable fraction, credit calculation (including first-year calculation), placed-in-service issues, rehab projects, tax-exempt bonds, projects with HOME funds, Next Available Unit Rule, employee units, mixed-income properties, the Average Income Minimum Set-Aside, vacant unit rule, and dealing effectively with State Agencies. March 21: Preparing Affordable Housing Properties for Agency Required Physical Inspections - Agency inspections of affordable housing properties are required for all affordable housing programs, and failure to meet the required inspection standards can result in significant financial and administrative penalties for property owners. This three-hour training focuses on how owners and managers may prepare for such inspections, with a concentration on State Housing Finance Agency inspections for the LIHTC program. Specific training areas include (1) a complete discussion of the most serious violations, including health & safety; (2) how vacant units are addressed during inspections; (3) when violations will be reported to the IRS; (4) the 20 most common deficiencies; (5) how to prepare a property for an inspection; (6) strategies for successful inspections; and (7) a review of the most important NSPIRE inspection requirements. As part of the training, attendees will have a blueprint they can use to prepare their properties for agency-required physical inspections - regardless of the program under which they operate. These sessions are part of the year-long collaboration between A. J. Johnson and MidAtlantic AHMA that is designed to provide affordable housing professionals with the knowledge needed to effectively manage the complex requirements of the various agencies overseeing these programs. Persons interested in any (or all) of these training sessions may register by visiting either www.ajjcs.net or https://www.mid-atlanticahma.org.

HUD Issues Clarifying HOTMA Guidance

Last week, the U.S. Department of Housing and Urban Development issued more detailed guidelines to assist in the enactment of the Housing Opportunity Through Modernization Act (HOTMA) of 2016. This Act aims to simplify procedures and lessen the responsibilities of public housing authorities (PHAs), private affordable housing owners, and residents. The recent Notice H 2023-10 introduces a range of technical adjustments and clarifications, sets the commencement date as January 1, 2024, and outlines the compliance timeline and necessary measures for owners of affordable multifamily rental properties, which include those financed by the low-income housing tax credit (LIHTC) equity. Key clarifications from the Notice include: Public housing authorities are required to revise their Annual Plan and Moving to Work (MTW) Plans. For Annual Recertification of income, owners may rely on verification from an interim reexamination, provided there have been no changes to the annual income since that interim assessment. The new deduction for elderly/disabled families, effective January 1, 2024, will be applied by PHAs and Multifamily Housing (MFH) Owners at the upcoming annual or interim reexamination, whichever occurs first, after the new deduction has been adopted by the PHA/MFH Owner. The phased-in relief will commence concurrently. Any tax refund or credit must be deducted from the total net assets of a family, irrespective of the deposit location. Owners are not required to apply the new passbook rate until they have updated their software systems. It has been clarified that workers compensation should always be excluded from annual income calculations, no matter the duration or frequency of the payments. Owners and managers of properties governed by the HOTMA regulations are advised to examine the revised notice to determine its relevance to their properties.

Legislation Introduced for Middle Income Tax Credit

In December 2023, Congress considered a new approach to America's housing affordability crisis with the introduction of the "Workforce Housing Tax Credit Act" in both the House and Senate. This proposed bill aims to establish a Middle-Income Housing Tax Credit, focusing on providing affordable housing options for middle-class families and young professionals who are beginning their careers. The United States is currently grappling with a housing affordability crisis that has transformed the landscape of American renters. With a decline in homeownership and a rise in rental demand, there is a pressing need for housing that bridges the gap between low-income options and high-end residences. This 'missing middle' represents a vast segment of the population, including families and individuals who earn too much to qualify for low-income housing but are priced out of the expensive housing market. The Workforce Housing Tax Credit (WHTC) aims to supplement the highly successful Low-Income Housing Tax Credit (LIHTC) program. The WHTC proposes additional tax incentives that would encourage the development of housing for tenants earning 60% to 100% of the area median income (AMI). These credits could also be transferred to the LIHTC program to benefit tenants generally earning below 60% of AMI. A key feature of the WHTC is its strategic utilization of state and local housing authorities' expertise in determining the most suitable projects for their communities. It also emphasizes the importance of public-private partnerships to leverage private investment in the housing sector. States are afforded significant flexibility in resource allocation, including the ability to transfer middle-income housing allocations to LIHTC and the combination of credits within housing projects. Notable aspects of the Workforce Housing Tax Credit Act include: State housing finance agencies will allocate tax credits to developers through a competitive process, akin to the LIHTC program. These tax credits are distributed over 15 years, accompanied by a 15-year compliance timeframe and a 30-year extended commitment. The allocation of tax credits to states is population-based, with the 2024 allocation set at $1 per capita and a minimum of $1.5 million for smaller states. An extra 5% of the allocation is reserved for middle-income housing in rural locations. For new construction, the credit would cover 50% of the construction costs over the life of the credit, while rehabilitated and bond-financed buildings would receive a credit equating to 20% of the construction costs. Additional credits are available for developments in areas that are challenging to develop, as identified by HUD. To be eligible for the credit, a minimum of 60% of a building s units must house individuals earning an AMI of 100% or less, with rent restrictions capped at 30% of the applicable income level. These affordability conditions are maintained for up to 15 years following the compliance period, totaling a 30-year affordability duration. The WHTC is designed to work in tandem with the LIHTC to bolster low-income housing. States can adjust allocations to address specific needs and may transfer any portion of their middle-income allocation to LIHTC anytime during the year. The WHTC can also enhance the financial viability of affordable housing projects by combining LIHTC and middle-income credits, provided that at least 20% of units cater to the middle-income bracket. The enactment of the WHTC is yet to be determined and has seen resistance from some low-income housing advocates who argue for the expansion of the LIHTC program instead. However, developers and managers of affordable housing recognize the necessity of a workforce housing initiative. If passed, the WHTC could significantly alleviate the current housing affordability issues. The Workforce Housing Tax Credit Act intends to build on the achievements of LIHTC and presents a critical solution that Congress could adopt to address the ongoing housing affordability dilemma. As the legislation progresses, the appropriate committees in both the House and Senate will deliberate over the bills. At present, no specific timeline has been established for the passage or concrete legislative action regarding the Act.

Verification of Value and Determination of Income from Real Estate Investments

Virtually all affordable housing programs, including those using assistance from the Department of Housing & Urban Development (HUD) and the Rural Housing Service (RHS), as well as Low-Income Housing Tax Credit (LIHTC) projects, must determine actual or potential income from assets when projecting the income of applicants and residents. The rules governing how to do this are contained in HUD Handbook 4350.3. One of the more complex assets to deal with when projecting income is real estate. In many - if not most cases - real estate owned by a member of an assisted family will be considered an asset. In this article, I will outline the circumstances under which real estate is not an asset and will explain how to determine income from real estate when it is an asset. When is real estate not an asset to a family? The decision as to whether to treat real estate as an asset depends on family circumstances. The net income derived from an applicant s real estate holdings will either be considered business income or income from an asset. If the resident s main business is real estate, income from the rental of real estate is considered business income, and since the real estate is an asset of an active business, it should not be considered an asset to the household. To consider real estate as the primary business of the individual, income from real estate should generate most of the income for the person. While relatively rare in affordable housing, the presence of residents whose main business is real estate is not unheard of. And, in such cases, the net income from the business will be counted as household income. The best documentation of such business income is IRS Schedule E (Form 1040). This form is used to report income (or loss) from rental real estate. When is the real estate an asset to the family? If real estate is not the main business of an applicant or household, then the real estate is considered an asset. If the property is rented, the net income from rent is considered asset income. To determine the value of the property, subtract amounts owed on the property, as well as a reasonable cost of sale, from its market value. For example, assume an applicant owns a single-family home that is rented. The market value of the home is $250,000, and the applicant owes $105,000 on the mortgage. Assume a cost of sale of $20,000. Cash value is determined by subtracting the cost of sale from the market value, and then subtracting the balance on the mortgage. So, the calculation is $250,000 minus $20,000 minus $105,000 = $125,000 cash value. In order to determine income from the asset, the rental income must be verified. Once the gross rent is verified, you may deduct any verifiable operating expenses, such as mortgage interest payments, taxes, insurance, and maintenance. The resulting net income is considered asset income. Verification of Cash Value To determine cash value, the fair market value must first be determined. The fair market value (FMV) is the amount that another person would pay to acquire the property in an open-market transaction. There are several ways to verify market value, including (1) tax assessments {in some states}; (2) online real estate listing; (3) an estimate from a qualified broker; or (4) a bona fide sales contract. Once the market value has been determined, a verification of any outstanding mortgage balance is required. Then, the process outlined above for determining cash value is followed. Verification of Rental Income A variety of documents may be used to verify rental income. These include a current lease, recent rent checks, or the latest IRS Schedule E (Supplemental Income and Loss). HOTMA and Real Estate HUD s Final Rule relating to the implementation of The Housing Opportunity Through Modernization Act (HOTMA) is now in effect. The final rule did not change how the cash value and income from real estate is determined. But HOTMA did establish new household asset limitations preventing households that own real property "suitable for occupancy," or assets over $100,000, from receiving HUD rental assistance. However, housing providers may establish exceptions and have a great deal of discretion in enforcing the new limits on current residents. It is also important to note that these limitations apply to HUD programs only - not RHS or LIHTC.

HUD NSPIRE Standards Include "Affirmative" Requirements

HUD s new housing inspection process provides a single inspection standard for all units under the Public Housing, Housing Choice Voucher, Multifamily, and Community Planning & Development (CPD) housing programs. The National Standards for the Physical Inspection of Real Estate (NSPIRE) replaces Housing Quality Standards (HQS) that were created in the 1970s and the Uniform Physical Condition Standards (UPCS) that were developed in the 1990s. Over the years, it became clear that the older standards provided inaccurate and inconsistent results. These prior standards placed a disproportionate emphasis on physical inspections around the appearance of items that were actually safe and functional, while a lack of attention was given to the health and safety of the properties. As a result, NSPIRE emphasizes habitability and the residential use of structures, and most importantly, the health and safety of residents. Inspectable areas under NSPIRE are the apartments themselves, elements of the building s non-residential interiors, and the outside of buildings. The goal is to ensure that the elements of these three areas are "functionally adequate, operable, and free of health and safety hazards" [24 CFR 5.703(a)]. As part of the NSPIRE standard, HUD has developed "affirmative requirements" for all units that participate in HUD s rental assistance programs. And, because the physical inspection process for the Low-Income Housing Tax Credit Program (LIHTC) is required to follow HUD inspection standards, these affirmative requirements also apply to LIHTC properties. These include basic requirements for habitability such as kitchens and flushable toilets as well as important safety concerns like Ground Fault Circuit Interrupter (GFCI) Outlets, a permanent heating source, and safe drinking water. Here are the affirmative requirements for each area: Units (A dwelling unit refers to the interior components of a household s home). Bathtub or shower must be usable in privacy. There must be food storage space. CO alarms in proper locations are required. Must be a primary cooking appliance. Any outlet within six feet of a water source must be protected. Must have a food preparation area. Guardrails must be present in required areas. The inspection date is on or between October 1 and March 31 and the permanently installed heating source is not working or is working but the interior temperature is below 68 degrees. The inspection date is on or between April 1 and September 30 and a permanently installed heating source is damaged, inoperable, missing or not installed. There is an unvented space heater that burns gas, oil, or kerosene. There must be at least one (1) permanently installed light fixture in the kitchen and bathroom. There must be at least two working outlets in each habitable room OR at least one working outlet and one (1) permanently installed light fixture. There must be a refrigerator. Hot and cold water must run from sinks. There must be a sink in the primary kitchen. Smoke alarms must be installed where required. Toilets must be usable in private. Inside (These areas refer to the common areas and building systems generally found within a residential building s interior that are not inside a unit). CO alarms in proper locations are required. Any outlet within six feet of a water source must be protected. Guardrails must be present in required areas. There is an unvented space heater that burns gas, oil, or kerosene. The inspection date is on or between October 1 and March 31 and the permanently installed heating source is not working. There must be at least one (1) permanently installed light fixture in the kitchen and bathroom. Smoke alarms must be installed where required. Outside (Outside areas refer to a building site, building exterior components, and any building systems located outside of a building or unit. These include items and places such as mailboxes, walkways, lighting, roads, parking lots, play areas and equipment, and non-dwelling buildings. Components on the exterior of a building are also considered outside areas, such as doors, fire escapes, lighting, roofs, walls, windows, foundations, and attached porches). Any outlet within six feet of a water source must be GFCI protected. Guardrails must be present in required areas. Bottom Line - owners and managers of properties subject to NSPIRE must ensure that all the noted affirmative requirements are in place prior to the first inspection using the NSPIRE standards.

A. J. Johnson Partners with Mid-Atlantic AHMA for December Training on Affordable Housing - February 2024

During February 2024, A. J. Johnson will be partnering with the MidAtlantic Affordable Housing Management Association for four live webinar training sessions intended for real estate professionals, particularly those in the affordable multifamily housing field. The following sessions will be presented: February 13: HOTMA - Update on HUD Requirements - On January 9, 2023, HUD published a final rule implementing The Housing Opportunity Through Modernization Act (HOTMA), which was signed into law on July 29, 2016. This final rule was published in the Federal Register on February 14, 2023, and will become effective on January 1, 2024. Virtually all HUD programs are impacted by the rule, as are the Low-Income Housing Tax Credit (LIHTC) Program and the Rural Development Section 515 Program. Since publishing the final rule in February 2023, HUD has provided additional guidance in the implementation of the rule. This three-hour training will explain the new HUD guidance and will cover the following areas: (1) Definitional changes relating to earned and unearned income, non-recurring income, and foster children; (2) Revised Income Exclusions; (3) New requirements relative to Student Financial Assistance; (4) Changes to the HUD permitted deductions from gross income, including a full review of the new "hardship exemptions;" (5) Brand new rules regarding assets; (6) New Interim Recertification requirements; (6); and (7) the new definition of "annual income." This session is a must for all managers of HUD, Rural Development, and LIHTC properties, and will provide plenty of opportunity for Q & A. February 15: The Basics of Low-Income Housing Tax Credit Management -  This training is designed primarily for site managers and investment asset managers responsible for site-related asset management and is especially beneficial to those managers who are relatively inexperienced in the tax credit program. It covers all aspects of credit related to on-site management, including the applicant interview process, the determination of resident eligibility (income and student issues), handling recertification, setting rents - including a full review of utility allowance requirements - lease issues, and the importance of maintaining the property. The training includes problems and questions designed to ensure that students are fully comprehending the material. February 20: Documentation of Lease Violations - Managers of multifamily housing properties too often find themselves in the position of not being able to enforce the terms of a lease or evict a resident for severe violations simply because of a failure to properly document the file. While failure to pay rent is the most common lease violation, other issues create the greatest challenge concerning eviction or lease enforcement. This 90-minute session will review some of the most problematic material lease violations and discuss how to properly document those violations. Topics to be discussed will include hoarding, tenant-on-tenant harassment, assistance animal violations, smoking violations (in non-smoking buildings), unauthorized occupants, and "quiet use and enjoyment" issues. The training is intended for site managers and leasing staff, as well as regional property managers. This session is a must for all managers of HUD, Rural Development, and LIHTC properties, and will provide plenty of opportunity for Q & A. February 22: The Verification and Calculation of Income and Assets on Affordable Housing Properties - This five-hour live webinar (there will be a 1.5-hour lunch break) provides concentrated instruction on the required methodology for calculating and verifying income, and for determining the value of assets and income generated by those assets. The first section of the course involves a comprehensive discussion of employment income, along with military pay, pensions/social security, self-employment income, and child support. It concludes with workshop problems designed to test what the student has learned during the discussion phase of the training and serve to reinforce HUD-required techniques for the determination of income. The second component of the training focuses on a detailed discussion of requirements related to the determination of asset value and income and applies to all federal housing programs, including the low-income housing tax credit, tax-exempt bonds, Section 8, Section 515, and HOME. Multiple types of assets are covered, both in terms of what constitutes an asset and how must they be verified. This section also concludes with a series of problems, designed to test the student s understanding of the basic requirements relative to assets. These sessions are part of the year-long collaboration between A. J. Johnson and MidAtlantic AHMA that is designed to provide affordable housing professionals with the knowledge needed to effectively manage the complex requirements of the various agencies overseeing these programs. Persons interested in any (or all) of these training sessions may register by visiting either www.ajjcs.net or https://www.mid-atlanticahma.org.

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