Follow Four Tips to Prevent Owners from Losing Credits Claimed Too Soon

November 29, 2016    

In the Fall 2016 Special Issue, we discussed how a site owner may comply with first-year certification requirements under Internal Revenue Code (IRC) Section 42(l)(1). Making the certification involves Form 8609, Low-Income Housing Credit Allocation and Certification. The agency executes Part I...

How to Set Up Household Files to Save Time and Avoid Tax Credit Recapture

November 29, 2016    

At some tax credit sites, setting up a household file may mean randomly tossing all the paperwork concerning a household into a folder. Or household files may be organized in a way that’s understood by only one or two staffers. But practices like these can cost the owner its tax credits....

Meet Requirements of Annual Certification to State Housing Agency

November 7, 2016    

As the end of the calendar year nears, your site’s annual certification to your state housing agency is approaching. Under Treasury Regulation Section 1.42-5(c)(1), owners are required to certify to the state agency that allocated the credit at least annually that, for the preceding 12-...

How to Comply with IRC Section 42(l)(1), First-Year Certification

November 7, 2016    

In addition to annual certifications, owners are required to complete a “First-Year Certification” under Internal Revenue Code (IRC) Section 42(l)(1). The certification is made to identify specific information needed for the administration of the program and document specific...

Prevent NAU Rule Violations Triggered by Household Composition Changes

September 29, 2016    

You probably know that when a low-income household’s income exceeds 140 percent of the income limit (or 170 percent in the case of deep rent-skewed units), you must follow the Next Available Unit (NAU) rule to make sure the owner can continue claiming credits for the over-income unit. But...

Best Practices for Complying with HUD's Guidance on Criminal Background Checks

August 30, 2016    

In the May issue, we discussed HUD’s new guidance on criminal background checks. The new guidelines spell out how HUD will evaluate fair housing complaints in cases where a site refuses to rent or renew a lease based on an individual’s criminal history. The new guidance has brought...

Instruct Staff Not to Accept Rent Checks from Nonresidents

July 28, 2016    

From time to time, you or a staff member may get a rent check from someone other than the resident named on the lease. If you deposit the check and it turns out that the resident is illegally subletting his unit to the person who sent the rent check, you could run into problems. A court may rule...

Understanding Possible NAU Violations in 100 Percent LIHTC Buildings

July 28, 2016    

The tax credit law allows low-income units to remain qualified even when a household goes over-income. But to maintain the unit’s low-income status, when a household’s income exceeds 140 percent of the income limit (or 170 percent in deep rent-skewed units), you must follow the next...

Immediately Address 'Exigent' Health and Safety Hazards to Keep Site Compliant

May 31, 2016    

During an inspection, Real Estate Assessment Center (REAC) inspectors look at specific areas of the site for health and safety hazards. Most of these hazards can cost you points on your inspection score but don’t necessarily subject you to other, more serious penalties.

Avoid Blanket Bans of Ex-Offenders When Conducting Criminal Background Screenings

April 27, 2016    

HUD’s Office of General Counsel (OGC) recently issued guidance addressing how refusing to rent or renew a lease based on an individual’s criminal history could violate the Fair Housing Act (FHA). Last year, in Texas Department of Housing and Community Affairs v. Inclusive...

IRS Amends LIHTC Utility Allowance Submetering Regulations

March 28, 2016    

On March 3, the IRS and the Treasury Department published amended regulations for utility allowances at LIHTC sites. The two sets of regulations issued help owners use a consumption-based utility allowance at properties that are either submetered or generate and sell energy using onsite...

Understand Three Events to Minimize Tax Credit Recapture Liability

October 29, 2015    

One of the biggest concerns owners and managers face is housing tax credit recapture. Under Section 42 of the Internal Revenue Code, low-income housing tax credits are allocated to a site annually over a 10-year period. But these tax credits are subject to a 15-year compliance period. This means...