News

HUD Issues Violence Against Women Act (VAWA) Rule

In the October 27, 2010 Federal Register, HUD published the final rule implementing the Violence Against Women Act (VAWA). The final rule clarifies and expands on previous guidance regarding owner and manager responsibilities for implementation of the rule. Among the critical clarifications: Owners/agents must do all they can to keep domestic violence victims in their homes. This includes transferring victims to different units, banning the abuser from the property, calling the police when abusers are spotted at the property, and seeking legal assistance in preventing abusers from carrying out threats. The rule also makes clear that victims must provide evidence of abuse in order for the law to apply. Evidence may be in the form of a police or court record, written statement of a medical professional or other witness to the threats or violence, or the victim s own written statement on a HUD-approved certification form. Due to the complex nature of this rule, HUD has indicated that further guidance on implementation is forthcoming. Until that happens, owners and agents should become familiar with the final rule and its requirements. A copy of the rule may be obtained at http://edocket.access.gpo.gov/2010/pdf/2010-26914.pdf.

Pending Legislation Would Reform Section 202 & 811 Programs

Congress has approved bills to reform the Section 202 and 811 supportive housing programs for the elderly. S.118 revised the prepayment and refinancing provisions of the law for Section 202 projects and now require the project sponsor to operate a project as affordable for at least 20 years after the maturity of the original loan. The bill also provides for subordination or assumption of a 202 loan when there is new financing, meaning prepayment will no longer be the only option. When prepayment is requested, tenants must be given an opportunity to comment. The 811 program was amended by S.1481. The bill allows for a delegated processing procedure similar to what is currently permitted for Section 202 projects. The bills made a number of other changes relative to the two programs, and developers of 202 and 811 properties should review the bills in their entirety.

Notice Requiring Owners with Project-Based Rental Assistance Contracts or Section 202 or 811 Project Rental Assistance Contracts to Obtain Dun and Bradstreet Numbering System (DUNS) Numbers and to Register in the Central Contractor Registration (CCR)

HUD issued notice H 2011-01 on January 5, 2011, providing the regulatory reporting requirements and guidance for legal entities receiving federal assistance. Rental assistance payments made under Project-Based Section 8 or Section 202 or 811 Project Rental Assistance Contracts are covered under these requirements. Owners must obtain a DUNS number and have an active, valid registration in CCR within 60 days of the publication date of this Notice. An owner s failure to obtain a DUNS number and CCR registration within the timeframe allotted may result in the suspension of housing assistance payments or rental assistance payments. The notice includes guidance for the following: Background on Public Law 109-282, The Federal Funding Accountability and Transparency Act of 2006 Deadline for obtaining DUNS Numbers and Registration in CCR Process for Obtaining a DUNS Number and Registration in CCR Utilization of CCR and DUNS information The Notice is posted on HUDCLIPS at: http://www.hud.gov/offices/adm/hudclips/notices/hsg/ It is critical that all multifamily owners receiving Project-Based Section 8, 202, or 811 rental assistance obtain the notice and follow it s guidance no later than March 5, 2011 in order to avoid potential loss of subsidy.

State Agencies Making Preservation a Priority

An examination of the proposed Qualified Allocation Plans (QAP s) for 2011 makes clear that preservation of existing housing is becoming more of a priority for the tax credit program. In 2011, a number of states, including Arizona, Florida, New Hampshire, North Carolina, Ohio, and Wisconsin have established incentives for preservation. Incentives include additional points for competitive applications, increased set-asides, and allocation priorities. Developers seeking credits in these and other states should carefully examine the QAP s and tailor applications to maximize the potential for success; in many cases, this will mean the development of acquisition/rehabilitation projects as opposed to new construction.

IRS Priorities for 2011

The IRS and Treasury Department will give priority to issuing guidance on a number of issues relating to the Low-Income Housing Tax Credit Program in 2011. According to the 2010-2011 priority guidance plan released on December 7, 2010, the IRS will focus on four areas relating to the LIHTC in 2011: 1. Final regulations for qualified contract requirements. The IRS issued proposed regulations in July 2007. The final regulation will clarify purchase price calculations and state Housing Finance Agency obligations when taxpayers request that the HFA find a qualified contract purchaser; 2. Final regulation regarding utility allowances for submetered buildings. In May 2009, the IRS clarified that building owners may establish a utility allowance in submetered, rent-restricted units. A final regulation will codify this and clarify some of the questions that remain on this issue; 3. IRS intends to publish guidance regarding the ten-year placed in service restriction on acquisition credits for federal or state-assisted buildings; and 4. Additional guidance on tax credit recapture as required by 42(j)(6). We will provide updates as these regulations are finalized by the IRS.

Proposed Rule Bans Discrimination Based on Sexual Orientation or Gender Identity in HUD Assisted Projects

On January 24, 2011, HUD issued a proposed rule making it illegal for owners and managers of HUD-assisted housing or FHA-insured housing to discriminate on the basis of sexual orientation and gender identity. HUD has found significant evidence of discrimination against lesbian, gay, bisexual, and transgendered (LGBT) individuals and families. A number of states, including the District of Columbia, and more than 200 localities already ban discrimination against LGBT applicants and residents for housing. This proposed rule does not make LGBT a protected class under federal fair housing law, since only Congress can make changes to that law; it applies only to HUD assisted programs - both multifamily and single family. Owners of non-HUD-assisted housing should keep in mind however that discrimination due to LGBT characteristics could result in a fair housing action under one of the seven protected classes, such as sex or disability. The best protections against such legal actions are occupancy policies that are fully non-discriminatory, except for legitimate reasons such as credit, criminal records, etc. Comments on the proposed rule are due by March 25, 2011.

Using Fair Housing Logos to Stay Out of Trouble

Project s using Federal or State financing are generally required to use approved fair housing logos on all signage and advertising. However, the use of the logos on any housing advertising - regardless of the source of financing or whether rental assistance is used - can help keep a property out of trouble from a fair housing standpoint. There are three types of fair housing symbols and statements that are acceptable as a stated commitment to fair housing - the Fair Housing Logo, Fair Housing Statement, and Fair Housing Slogan. Fair Housing Logo The Fair Housing Logo (the little house with the "equal" symbol inside) may be used in any type of ad. When used in space or box advertising, the logo should meet the following size requirements: Ad size of 1 2 page or more: logo size 2"x 2"; Ad size of 1/8 - 1 2 page: logo size 1"x 1"; and Ad size less than 1/8 page: logo size 1 2"x 1/2" If other logos are used in the ad, the fair housing logo should be no smaller than the largest of the other logos used. Fair Housing Statement A Fair Housing Statement may be used in any ad, with or without the Fair Housing logo. The statement should occupy 3-5% of the total ad space. An example of a Fair Housing Statement would be: "We believe in and follow all laws relating to the provision of equal opportunity for all persons in the provision of housing. We do not discriminate in the provision of housing based on Race, Color, Religion, Sex, National Origin, Familial Status, or Handicap." When state or local law contains other protected classes not noted above (such as source of income, sexual orientation, marital status, etc.), those classes should be included in the statement. Fair Housing Slogan The Fair Housing Slogan - "Equal Housing Opportunity" - may be used in very small ads where the logo may not be appropriate or possible, such as ads that are less than four column inches long.