Use Pre-Application Questionnaire to Save Time Screening Households for Eligibility

Tax credit site managers often find themselves wasting time and money processing applications for ineligible households. You need an easy way to get basic eligibility information right away so that you can focus your administrative efforts on eligible households.

One solution is to have households fill out a pre-application questionnaire instead of putting each household interested in your site through the full application process. A pre-application questionnaire asks for the minimum amount of information you need to determine whether a household qualifies to live at your site or should even be put on the waiting list. And it can help you quickly assess whether your marketing efforts are targeting the right households, particularly during initial lease-up of tax credit sites.

In addition, using pre-application questionnaires can be invaluable during lease-ups for new construction where owners or managers would like to create a waiting list of potentially qualified applicants, and in site acquisition/rehab due diligence circumstances where the owner would like to quickly determine who may or may not be qualified for low-income housing tax credit purposes if and when tax credits are added to the property, says tax credit expert Karen Graham. With her help, we’ve put together a Model Form: Get Key Eligibility Information to Target Qualified Households, that you can adapt to make your leasing and marketing efforts more effective.

Benefits of Pre-Application Questionnaire

By using a pre-application questionnaire like ours, you can:

Target eligible households. As a tax credit manager, you know how much effort goes into finding eligible households. You often have to interview and process many applications just to find one household that meets the tax credit program requirements.

For example, if you’re leasing up a senior housing site in a Sunbelt state, you may be flooded with applications, many of which are from ineligible households. By using a pre-application questionnaire, you can quickly eliminate ineligible over-income or student households. This will help save you time and money that you’d have to spend on more expensive and time-consuming screening techniques, such as criminal background checks, credit history checks, or prior landlord reference checks. It will also help you keep your waiting lists more manageable. And households won’t have to go through a long application process just to find out that they don’t qualify for the tax credit program.

Also, some low-income households may be eligible for your site but may not be able to afford it. If you’re anxious to lease units to eligible households to meet your minimum set-aside, you don’t want to lose these people. A pre-application questionnaire will allow you to identify households that can’t afford the rent so that you can refer them to housing assistance programs. By the time they reach the top of the waiting list, they may have the assistance they need to afford the rent.

It’s important to note that when a site has other funding sources such as HUD, these funding sources may require specific forms or waiting list processes that must be used. If this is the case, you’ll need to follow these requirements. So be sure to ask your attorney if you can use our questionnaire in addition to the forms required by other funding programs.

Assess marketing strategies. You can also use the pre-application questionnaire to get a general picture of who’s looking at the property. It’s particularly important for new developments to sort out who’s in their market. You can then limit your advertising and marketing strategies to those that attract eligible households. For instance, if a particular newspaper ad is bringing in lots of ineligible households, it’s not working for your site and you can probably stop paying for it. Or you may find that press releases to local church groups and social service agencies bring in many more eligible households and you should pursue those avenues instead.

You can also use the pre-application questionnaire to spark more serious interest from casual visitors to your site, like those who stop by to get a look around but decline to go on the waiting list, give a deposit, or fill out a long application. Giving them a shorter questionnaire makes it easier for fence sitters to give you basic information about themselves. That way, you can keep in touch with those who qualify and continue marketing to them. Those who aren’t sure if they want to move in might give your site a second look and come in to fill out a full application after learning that they tentatively qualify.

Give Pre-Application Questionnaire to Interested Applicants

Offer a pre-application questionnaire to every applicant who expresses interest in your site. If applicants request information over the telephone, you may mail them a hard copy in a package that includes a self-addressed envelope or you may email them a PDF of the form. If they visit the site, tell them that they can fill out the pre-application questionnaire at the leasing center or take it home and return a completed form to you in the envelope provided.

What to Ask

Like our Model Questionnaire, your questionnaire should ask for the following:

Name and telephone number for head of household. Ask for the contact information of the household head.

How household heard about the site. Ask how the household found out about your site (for example, newspaper ad, word of mouth, agency referral). This information can help you assess which marketing and advertising strategies are attracting eligible households. Adapt this question to the advertising and marketing methods you use at your site.

Names of household members. Ask for the name of each person who’ll be living at the site so that you know how many people are in the household. You need to know household size to determine the qualifying income level and what size unit the household needs. Plus, if most of the potential applicants that you’re seeing need larger units, then you may need to step up marketing to attract households for the smaller units.

Gross annual income and income from assets. Ask for the total annual income before taxes for all members of the household who’ll live in the unit, including employment income, income from assets, government benefits, and all other sources. To meet the preliminary eligibility requirements for your site, this amount must be less than the qualifying tax credit income level for that household size.

Whether any members of the household are full-time students. Tax credit rules bar households composed entirely of full-time students from living in a tax credit unit. To be considered a full-time student, the household member must take a full course load as defined by his or her educational institution for at least five months of the calendar year. Children in elementary, middle, and high school are also considered full-time students. So your pre-application questionnaire, like ours, should specify the IRS criteria for full-time student status and ask if any household member meets it. If the answer is yes, ask how many members are full-time students. The questionnaire should also list the exceptions that would permit a full-time student household to live at the site and ask households to check off any that apply. If an entire household is composed of full-time students, the household isn’t eligible unless at least one member falls under one of the exceptions.

Whether any members meet site- or company-specific requirements. Some tax credit sites also operate under a senior housing program or give preference to seniors. Others may be a non-smoking site, have occupancy standards limiting the number of people per bedroom, or the applicant may need a unit that’s accessible or adaptable for the disabled, notes Graham. If that’s true of your site, your questionnaire should include additional questions to meet the specific qualifications of your property or project.

Insider Source

Karen Graham, CPM(R), HCCP, SHCM: President, Karen A. Graham Consulting, LLC; www.compliancesupport.com.