News

New York Congressman Introduces Bill Excluding Military Housing Allowance from Income for LIHTC Properties

On June 2, 2011, Congressman Bill Owens of New York introduced legislation that would exclude the military Basic Allowance for Housing (BAH) from income for eligibility purposes for properties operating under the Section 42 program. Currently, only a small number of military personnel receive this benefit. In order to do so, they must apply at a LIHTC property located in one of the nine areas made exempt from the counting of BAH by HERA 2008. This legislation, if passed, would exempt all military from the counting of BAH. There is no timetable for the consideration of this legislation at this point.

HUD Makes it Clear that LIHTC Compliance Monitoring Fees are Includable in Section 8 Budgets

In a May 31, 2011 memo to field offices, HUD reiterated, "Projects with low income housing tax credits may include in their budgets the cost of the annual compliance reports (a.k.a. state allocating agency s compliance and asset monitoring fees) that must be submitted to the tax credit allocation entity." This memo was issue in an effort to bring consistency to HUD offices relative to approval of compliance monitoring fees for Section 8 properties.

No More Paper Checks for Federal Benefits

Paper checks are being phased out for all federal benefit payments. Beginning May 1, 2011, anyone newly applying for Social Security, Veterans benefits or any other federal benefit, will need to choose an electronic payment method - paper checks will no longer be an option. People currently received federal benefits by paper check must switch to direct deposit by March 1, 2013. Money will either be direct deposited to a bank or credit union account or to a prepaid debit MasterCard. Managers of affordable housing properties required to verify income for eligibility purposes will begin seeing this method of deposit more often. Verification of federal benefits will still be available by award letter. If money is direct deposited to bank accounts, the accounts will continue to be treated as assets and verified by the banking institution or copies of bank statements. Money deposited to a prepaid debit card should also be treated as an asset, but in this case, it would be considered the same as "cash- on-hand."

House Financial Services Committee Discussion Bodes Well for Multifamily Housing

At a March 1, 2011 hearing on HUD s fiscal 2012 budget, there was bipartisan agreement on the need to preserve affordable rental housing. While discussion centered generally on budget cutting, Committee Chairman Spencer Bacchus (R-AL) noted the bipartisan agreement among committee members that the greatest priority should be on multifamily housing for low-income families. Bacchus stated, "We do realize that, for low-income Americans, a great percentage of them cannot afford homeownership, so for them renting is really the best option." The tone of the discussion is good news for the affordable housing industry since it indicates that even among the most hawkish budget cutters, there is a realization that the government cannot abandon low-income renters to the mercy of the free market.

Mississippi Requiring Community Services for LIHTC Projects

The Mississippi Home Corporation (MHC) is requiring all 2011 low-income housing tax credit projects to provide tenant services not usually offered in affordable housing. The requirement, which is part of the Agency s Qualified Allocation Plan (QAP) requires that projects commit to provide a minimum of two community services in at least two of four unrelated areas. These areas are (1) personal development; (2) counseling; (3) child development; and (4) community awareness events/activities. The services have to be provided for at least ten years after the later of a project s placed in service date or the date when a class or service starts. Services must be offered to residents at least annually, and each service or course must be updated on a regular basis. Developers and managers utilizing 2011 credits in Mississippi should review the details of these requirements in the States QAP.

Ohio Considering New Requirements for Tax Credit Market Studies

The Ohio Housing Finance Agency (OHFA) is considering the adoption of new requirements for tax credit project market studies. The changes would include new procedures that will demand more comprehensive conclusions regarding project feasibility. Analysts may also be required to develop their own recommended tax credit rents. Another change would require analysts to determine capture and penetration rates using a consistent formula, although the analyst could use a different formula if justified. There is no set timeframe for enacting the proposed guidelines.

HUD Notice Regarding Protection of Tenant Privacy

HUD has recently restated its intention to punish owners and managers of HUD assisted housing who fail to adequately safeguard the personally identifiable information (PII) of applicants and tenants in HUD assisted properties. Notice PIH 2010-15(HA), issued on May 6, 2010, provides details on HUD requirements regarding privacy protection and should be reviewed by all operators of HUD assisted housing. The Notice provides guidance on protecting sensitive privacy information, and outlines the steps that contractors and third party business partners should take to ensure protection of sensitive information. Among the steps stipulated in the Notice: Collect only PII that is needed; Manage access to PII by sharing it only with personnel with a "need to know." Be careful when discussing PII on the phone, and never leave messages containing sensitive PII on voicemail; Protect hard copy and electronic files containing PII; Protect electronic transmissions of sensitive PII via fax, email, etc; Protect hard copy transmissions of files containing PII; and Have a solid program in place relative to records management, retention and disposition. Details of these requirements are contained in the Notice. All owners/agents of HUD assisted properties should obtain a copy of the Notice and abide by its requirements.

HUD Develops Self-Certification for Owners to Show Eligibility for Weatherization Assistance Program

HUD has developed a self-certification procedure enabling owners of HUD-assisted multifamily housing projects to show eligibility for the Department of Energy (DOE) Weatherization Assistance Program (WAP). On January 25, 2010, DOE published a regulation that was intended to reduce the review burden related to WAP income eligibility for HUD properties. The initial list of properties provided by HUD to DOE included only properties for which HUD was able to verify tenant income information based on available data sets. Due to HUD s limited data sets, the list omitted multi-building properties for which HUD was unable to match tenant addresses to individual buildings to determine in income eligibility requirements were met. Under program rules, at least 66 percent of the units in each building (50 percent for two to four unit buildings) must have incomes below 200 percent of the poverty level. The revised policy relies on certified annual income records and building information provided by property owners. An owner or agent must sign a self-certification attesting that the owner or agent maintains certified income records for households at the property, has reviewed the certified income records, and has determined that residents in at least 66 percent of the units in each building have certified incomes at or below 200 percent of the poverty level based on household size. Once HUD reviews and accepts the owner provided documentation, the property will be added to the supplemental list of properties eligible to participate in the WAP program. Properties assisted by HUD, Rural Development, and those with Low-Income Housing Tax Credits are eligible to participate in the program. For additional information, refer to DOE Weatherization Program Notice 10-15, Effective date March 2, 2010.