Feature Articles

How to Track Applicable Fraction to Help Avoid Tax Credit Loss

August 30, 2018    

Keeping each building’s applicable fraction on target is an essential part of a tax credit manager’s job. The applicable fraction is the percentage of a building’s units rented to low-income households. It comes into play when you calculate the building’s qualified basis...

Use Checklist to Review Household Files for Completeness

July 30, 2018    

It’s smart management practice to keep your household files up-to-date and complete all the time. Because LIHTC projects will be reviewed for compliance by the state and may be audited by the IRS, complete, well-organized files are very important.

Essential Addendums and Clauses to Include in Your LIHTC Lease

July 11, 2018    

When someone agrees to rent or lease an apartment, he signs a lease or rental agreement outlining the terms of the agreement. It’s a legally binding contract between the tenant and the owner that details the rights and responsibilities of each party. Unlike a typical market-rate apartment...

States' Preliminary Implementations of the Income-Averaging Option for Minimum Set-Asides

June 28, 2018    

The Consolidated Appropriations Act of 2018 established income averaging as a third minimum set-aside election, and this option happens to be one of the most significant changes to the LIHTC program in recent years. Every tax credit site must meet and maintain a minimum set-aside throughout the...

How to Fix Four Initial Certification Mistakes

May 24, 2018    

When performing the initial certification for a low-income household at your tax credit site, it’s easy to make mistakes. These mistakes can jeopardize the owner’s tax credits if your state housing agency finds them during an audit.

Keep Detailed Maintenance Records to Defend Against Mold Lawsuits

May 24, 2018    

A recent lawsuit filed on behalf of 400,000 residents against the New York City Housing Authority (NYCHA), the nation’s largest public housing authority, asked the judge to appoint an independent monitor to oversee operations because the agency failed to provide tenants with heat and hot...

Make Sure PLR Request Contains Required Information

April 27, 2018    

A private letter ruling (PLR) is a written response issued by the IRS to an owner or taxpayer when the owner asks a question about the tax effects of its acts or transactions. The questions posed by site owners usually entail uncertainty about how to handle a situation and the need for guidance...

How State Housing Agency Violations Differ from IRS Violations

April 27, 2018    

If you violate the federal tax credit law and don’t promptly correct the noncompliance, the owner may lose tax credits. Item 11 on IRS Form 8823 (Low-Income Housing Credit Agencies Report of Noncompliance or Building Disposition), which is the form the state housing agency uses to report...

Follow Three Dos & Don'ts on Setting House Rules Affecting Children

March 29, 2018    

Like many tax credit managers, you may have considered setting house rules aimed specifically at children. Your motive may be concern for children’s safety around specific hazards like swimming pools. Or if you’ve been getting noise complaints from residents or have recently found...

Three Tips on Advertising Without Violating the Fair Housing Act

March 29, 2018    

When you place ads to fill vacancies or waiting lists at your tax credit site, what those ads say or how they depict your site can greatly influence who responds. For this reason, fair housing advocacy groups pay close attention to ads for rental housing. If you say or depict the wrong thing,...

Spending Bill Contains Two Important LIHTC Program Changes

March 29, 2018    

On March 23, President Trump signed the Consolidated Appropriations Act, 2018 (H.R. 1625), a $1.3 trillion spending bill that funds the federal government through Sept. 30, 2018. In addition to preventing a government shutdown, this omnibus spending bill incorporated two key improvements adopted...

Understanding the 'Suitable for Occupancy' Requirement

February 28, 2018    

As an owner or manager, it’s important to keep your designated low-income units qualified as such under tax credit rules. Unless a site is deep rent skewed, a LIHTC site must have either 20 percent of the units rent-restricted and occupied by a household with income at or below 50 percent...