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A. J. Johnson

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Generally Allowable Medical Expenses

December 4, 2012

Generally Allowable Medical Expenses The rent calculation for many affordable housing programs, including HUD Section 8 and Rural Development Section 515, is based on the “adjusted” income of households. Adjusted income is the “gross” income of a household, minus…

IRS Publishes Sandy Disaster Relief Notice

November 6, 2012

Low-Income Housing Credit Disaster Relief for Hurricane Sandy The IRS issued Revenue Notice 2012-68 on November 5, 2012, effective after October 22, 2012, providing emergency housing relief as a result of Hurricane Sandy. The Notice allows State Housing Agencies…

Sign Posting Requirements

November 4, 2012

Every few years I like to remind clients of the various requirements relating to the sign posting requirements for companies in the property management business. Failure to post the signs can cost as much as $10,000 per violation, so it…

HUD Publishes Revised REAC Scoring Protocol

October 24, 2012

HUD has made a number of changes in the way REAC inspections will be scored, beginning with inspections on or after January 1, 2013. The changes are noted in Compilation Bulleting Revision 2.3. HUD has added a “point loss…

HUD Implements New Rental Assistance Demonstration Program

September 17, 2012

On July 26, 2012, HUD published a Final Notice in the Federal Register implementing the Rental Assistance Demonstration (RAD) Program. The program offers new opportunities to public housing agencies and some private owners of affordable housing projects. The program…

GAO Report on RHS Subsidy Errors

August 27, 2012

The U.S. Government Accountability Office (GAO) completed a study in 2012 that examined improper RA payments by the Rural Housing Service (RHS). The study found that between 2007 and 2010, RHS made from $15 million to $35 million in errors…

Possession of Drug Related Paraphernalia May Not be Reason for Application Denial

August 25, 2012

Management companies wishing to make possession of drug related paraphernalia a violation of criminal screening policies should carefully examine the definition of “drug-related criminal activity” contained in their screening procedures. The Housing Authority of Indiana County (HAIC), PA, denied…

Dealing with Reverse Mortgages on Affordable Housing Properties

August 24, 2012

Dealing with Reverse Mortgages on Affordable Housing Properties While not common on affordable housing properties such as LIHTC, Section 8 or Section 515, occasionally, an applicant with a reverse mortgage will turn up, and staff must know how to…

Use of Residual Receipts to Offset HAP Payments (Notice H-2012-14)

August 22, 2012

HUD Notice H-2012-14 was published on August 2, 2012 requiring the use of “New Regulation” Section 8 Housing Assistance Payments (HAP) Contracts residual receipts to offset project-based Section 8 HAP payments. This Notice applies to Section 8 New Construction/Substantial Rehabilitation…

HUD Eliminates Two Income Exclusions and Adds Others

August 13, 2012

HUD Amends List of Income Exclusions On July 24, 2012, HUD published in the Federal Register additional types of income that are excluded from income for purposes of determining eligibility for HUD housing programs. These exclusions also apply to…

A. J. Johnson Consulting to Introduce Pre-MOR Review Service

August 12, 2012

A. J. Johnson Consulting Services will begin offering a new service in January 2013. This service will be conducting pre-MOR reviews for properties with project-based Section 8 assistance. Those properties subject to HUD and Contract Administrator review will benefit from…

IRS Proposed Rule on Utility Allowances

August 11, 2012

The IRS has published a proposed regulation that will amend the IRS utility allowance regulation 1.42-10. This regulation outlines requirements relative to utility allowances on low-income housing tax credit buildings. The proposed regulation updates 1.42-10 to clarify that utility costs…

The Importance of Cost Segregation Studies

July 23, 2012

Cost segregation is the process of examining all the physical components of a property and classifying them based on their life expectancy for tax purposes. A major tax court case (AmeriSouth v. Commissioner (TC Memo 2012-67), March 2012) has resulted…

Must a Tax Credit Unit be a Tenant’s Only Residence?

July 1, 2012

Must a Tax Credit Unit be a Tenant’s Only Residence? I get asked the question above fairly often, and I always reply, “yes,” without ever providing a regulatory or statutory source for that answer. So, in order to ensure…

State Registered Lifetime Sex Offenders in Federally Assisted Housing

June 30, 2012

On June 11, 2012, HUD published Notice H 2012-11, which clarifies and supercedes Notice H 2009-11. The Notice reiterates the responsibilities of owners and agents of HUD-assisted properties relative to the rental of housing to lifetime registered sex offenders. …

Maryland Appeals Court Deems Pit Bulls Inherently Dangerous

June 23, 2012

In Tracey v. Solesky, No. 53, September Term 2012,the Maryland Court of Appeals has determined that showing that the owner of a dog or the landlord of a property knew that a dog is at least part pit bull is…

HUD Proposed Rule on Project-Based and Tenant-Based Vouchers

June 4, 2012

On May 15, 2012, HUD published a Proposed Rule on the implementation of the HERA 2008 changes to the Section 8 Tenant-Based Voucher and Section 8 Project-Based Voucher Programs. The proposed rule may be found in the Federal Register, Vol.…

Dealing with Bed Bug Infestation

May 29, 2012

Bedbugs: Addressing and Preventing Outbreaks in Tax Credit Properties By A. J. Johnson Outbreaks of bedbug infestation in apartments are increasing at an alarming rate in most metropolitan areas of the country, and low-income housing tax credit properties are…

HUD Publishes Formal Guidance on Infestation Control

May 29, 2012

On April 23, 2012, HUD published Notice H 2012-5, “Guidelines on Addressing Infestations in HUD insured and Assisted Multifamily Housing.” This guidance formalizes that in cases of infestation, owner priority should be the establishment of an Integrated Pest Management Plan…

Section 538 Web Conferences

May 27, 2012

In August and November 2012, the United Stated States Department of Agriculture will hold a series of teleconference calls and/or web conferences regarding the Section 538 Guaranteed Loan Program. These discussions are open to the public and will cover a…

Indiana Getting Tougher for Rules Infractions

June 1, 2011

Developers and developer team members who fall into noncompliance with LIHTC program rules will face tougher penalties under proposed rules issued by the Indiana Housing & Community Development Authority (IHCDA). Under the proposal, which is contained in the draft 2012-2013…

High Credit Demand Leads Massachusetts to Limit Applications

June 1, 2011

The Massachusetts Department of Housing & Community Development (MDHCD) is proposing to limit the number of applications a sponsor can submit and an increase in minimum project sizes for 2011. Developer demand for tax credits in 2010 exceeded their availability…

Michigan Proposing New Rules to Encourage LIHTC Development

June 1, 2011

The Michigan State Housing Development Authority (MSHDA) has proposed changes to its rules to make projects more feasible for LIHTC developers and to encourage new developers to participate in the program. A major change would eliminate the requirement that investors…

Maryland Loan Program Provides Financing for Energy Upgrades

June 1, 2011

The Maryland Department of Housing & Community Development (MDHCD) has established a loan program to finance improvements to energy systems for multifamily developments, single-family homes, and businesses. The program is called be SMART (Save Money and Resources Today), and if…

House 2012 Funding Bill Cuts RD Across the Board

June 1, 2011

The House passed the 2012 agriculture appropriations bill (H.R. 2112) on June 16 in which virtually all discretionary spending was cut. The effect of the amendment will result in a reduction in funding for the Section 515 Program of $457,080,…

Draft Legislation Would Transfer Rural Housing Service to HUD

June 1, 2011

The House Financial Services Committee has released draft legislation that would transfer the Rural Housing Service to HUD. The proposed legislation would create a new position at HUD of deputy assistant secretary for rural housing. The new department would be…

HUD Relaxes Restrictions on ex-Criminals in Public Housing

June 1, 2011

HUD Secretary Shaun Donovan has issued a letter to public housing agencies clarifying that ex-criminals may live in public housing under certain conditions. HUD outlines only two explicit circumstances under which ex-criminals are prohibited from public housing or issuance of…

HUD Raises Civil Penalty for Failure to Disclose Lead-Based Paint Hazards

June 1, 2011

HUD has raised the maximum penalty for failure to disclose lead-based paint hazards from $11,000 to $16,000. This is the first increase since 1996. A final rule increasing the penalty goes into effect on July 22, 2011.

Congress Unveils New Section 8 Proposals

June 1, 2011

The House Housing Subcommittee has released a modified version of an earlier Section 8 Voucher Reform proposal, and chances for passage this year look to have improved over what they were earlier. The bill, entitled the Section 8 Savings Act,…

HUD Provides Guidance Regarding The Counting Of Cents In Income

June 1, 2011

The Department of Housing & Urban Development recently issued a clarification regarding whether or not to count the “cents” that show up as part of the gross amount of Social Security income on Social Security Award Letters. The clarification was…

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