Transcript Test Slide One - Nan McKay and Associates

Managing Eligibility in Blended
Occupancy Projects
Sheryl Putnam and Samantha Pratter
Experience – Leadership - Collaboration
Learning Objectives
 Key program elements and requirements
for the following programs:
 Low Income Housing Tax Credit (LIHTC)
 Project Based Rental Assistance (PBRA)
 Project Based Voucher (PBV)
 Public Housing (PH)
 HOME
Learning Objectives
 Similarities and differences of determining
eligibility in combined funding projects:
 Citizenship requirements
 Social Security Number requirements
 Student rules
 Income limits
 Verification requirements
 Staff units in LIHTC units
Overview of Programs
 Program regulations sometimes
conflict
 A general rule is that the most
restrictive program wins!
Overview of Programs - LIHTC
 Provides the private market incentives for
construction, rehab or acquisition of low-income
rental housing
 Federal tax credits awarded to
owners/developers by State Housing Finance
Agencies (HFA)
 State HFAs perform ongoing compliance on
behalf of IRS
 Noncompliance may result in recapture of credits
by the IRS
Overview of Programs - LIHTC
 The federal minimum set-asides are minimums
 Federal minimum set-asides are 20/50 or 40/60
 Owners may also choose to rent to lowerincome households
 Known as deep rent skewing
 Indicated in regulatory documents
Overview of Programs - LIHTC
 Income limits
 Tenants in LIHTC units must meet specified
income limits
 Generally either 50% or 60% LIHTC income
limit, but may be lower depending on project
Overview of Programs - LIHTC
 Rent limits
 LIHTC units must be rent restricted
throughout the project’s compliance period
 Rent includes the utility allowance and cannot
exceed HUD’s published rent limits
Overview of Programs - PBRA
 Provided to either PHAs or private owners
 20 to 40 year HAP Contract with HUD after
completion of construction or rehab
 After the initial term of the HAP contract,
owners can continue or “opt out”
Overview of Programs - PBRA
 Rent limits
 Contract rent is approved by HUD as listed
on the HAP contract or amendment to HAP
contract
 Must be comparable to unsubsidized rents
Overview of Programs - PBRA
 Income limits
 Either the low-income (80% of AMI) or very lowincome (50% of AMI)
 Projects with HAP contracts on or after
10/1/81 must admit only very low-income (50%
of AMI)
Overview of Programs - PBV
 Section 8 HCV project-based voucher
 Allows PHAs that administer tenant-based
vouchers to attach up to 25% of voucher budget
authority to specific units or projects
 PHA and owner enter into a HAP contract
 Minimum of one year, maximum of 15 years
Overview of Programs - PBV
 Rent limits
 Contract rent is established by PHA on HAP
Contract
Overview of Programs - PBV
 Income limits
 Same as for Housing Choice Voucher (HCV)
Program
 Generally 50% of AMI
 PHA establishes that participants are incomeeligible
Overview of Programs - PH
 Created in 1937, public housing is owned
by local housing authorities (PHA)
 PH receives operating subsidy (and capital
grant) from HUD
Overview of Programs - PH
 Rents
 Tenant rent is the amount payable by family
 Families choose annually whether to pay
income-based or flat rent
 If income-based, TTP minus utility
allowance (if any)
 Flat rent is based on market value
Overview of Programs - PH
 Income limits
 For admission, family must have income at or
below 80% of AMI
 Once a family is admitted, they’re no longer
subject to the income limits
Overview of Programs - HOME
 HUD provides formula grants to states and
participating jurisdictions (PJs) for eligible
HOME activities
 Many different types of eligible HOME
activities
 This session is focusing on HOME-assisted
r rental housing eligible activity
Overview of Programs - HOME
 HOME projects must remain affordable for
5 – 20 years (affordability period)
 Depending on the type of HOME project
Overview of Programs - HOME
 Income limits
 Tenants in HOME-assisted units must meet
specified income limits:
 Low-income – 80% of AMI
 Very low-income – 50% of AMI
Overview of Programs - HOME
 Rent limits
 Two HOME rent limits for the HOME program:
 High HOME rent and low HOME rent – the
maximum rents that owners can charge
 Published annually by HUD
Overview of Programs - HOME
 HOME projects with five or more HOME
units must have 20% of HOME units
designated Low HOME Rent units
 Remaining units can be High HOME
 Owner must continuously maintain this mix
during the affordability period
Regulatory Agencies
 Internal Revenue Service (IRS)
 Bureau of the US Department of the
Treasury
 Allocates funds to each state on a percapita basis
Regulatory Agencies
 Housing finance agencies (HFA)
 State-chartered authorities established to help
meet the affordable housing needs of the
residents of their states
 Administrator of LIHTC program for IRS
 “Eyes and ears” of the IRS
 Perform desk audits; inspect housing;
inspect tenant files
 Issue reports of noncompliance to IRS
utilizing IRS Form 8823
Regulatory Agencies
 Housing and Urban Development (HUD)
 Contracts with entities that actually build,
manage, and maintain the buildings and
administer rent subsidy programs
 Public housing agencies (PHAs) in the
public sector
 Owners in the private sector
Regulatory Agencies
 Housing and Urban Development (HUD)
 Contracts with entities that actually build,
manage, and maintain the buildings and
administer rent subsidy programs
 Public housing agencies (PHAs) in the
public sector
 Owners in the private sector
Regulatory Agencies
 Contract administrators (CAs) – PBRA
 Program compliance function
 Ensures HUD-subsidized properties
serving eligible families at the correct level
of assistance,
 Asset management function
 Ensures the physical and financial health
of HUD properties
Regulatory Agencies
 Contract administrators (CAs)
 Generally housing agencies
 State housing finance agencies
 Local housing authorities
 Some partner with companies
specializing in this type of work
Regulatory Agencies
 Public housing authorities (PHAs)
 Created through state enabling legislation
 Contractual relationship with HUD through
the annual contributions contract (ACC)
Regulatory Agencies
 Participating jurisdictions (PJs)
 Any state or local government that HUD
has designated to administer a HOME
program
 Allocates the HOME funds
 Conducts compliance activities
throughout the project’s affordability
period
Regulatory Documents
 Successful management comes from a
thorough understanding of all governing
regulatory documents
 Key information outlined in documents
such as
 Affordability/compliance periods
 Income limits
 Number of units rent restricted
Regulatory Documents
 Key regulatory documents – LIHTC
 Section 42 of the Internal Revenue Code
(IRC) and related regulations
 The Qualified Allocation Plan (QAP)
 The Tax Credit Application
 Regulatory Agreement
 IRS Form(s) 8609 – one for each building
 The state-specific LIHTC compliance manual
Regulatory Documents
 Key regulatory documents – LIHTC
 HUD Handbook 4350.3
 Guide for Completing Form 8823: Low
Income Housing Credit Agencies Report of
Noncompliance or Building Disposition
 General Explanation of the Tax Reform Act
of 1986
Regulatory Documents
 Key regulatory documents – PBRA
 24 CFR Part 880 (for new construction)
 24 CFR Part 881 (for substantial
rehabilitation)
 State housing finance agencies
 24 CFR Part 883
Regulatory Documents
 Key regulatory documents – PBRA
 The Housing Assistance Payments (HAP) Contract
 HUD Handbook 4350.3 Occupancy Requirements of
Multifamily Subsidized Housing Programs
 HUD Handbook 4350.1, Multifamily Asset
Management and Project Servicing
 HUD Handbook 4381.5, The Management Agent
Handbook
 HUD Handbook 8025.1, Implementing Affirmative
Fair Housing Marketing Requirements for
Multifamily Housing
Regulatory Documents
 Key regulatory documents – PBV
 24 CFR Part 983 (PBV)
 24 CFR Part 982 and 5 (HCV)
 With the exception of the sections that
are not applicable as described in 24 CFR
Part 983
Regulatory Documents
 Key regulatory documents – PBV
 The Annual Contributions Contract (ACC)
 Administrative plan, agency/annual plan
 HUD 52578-B
 Similar to family obligations in voucher
 Project-Based Voucher Housing Assistance
Payment Contract (PBV-HAP contract)
Regulatory Documents
 Key regulatory documents – PH
 24 CFR Parts 5, 8, 100, 902, 903, 945, 960,
965, 966
 The Annual Contributions Contract (ACC)
 The Admissions and Continued
Occupancy Policy (ACOP)
 Five-Year Plan / Annual Plan
 The public housing lease
Regulatory Documents
 Key regulatory documents – HOME
 Authorized under Title II of the CranstonGonzalez National Affordable Housing Act
(42 U.S.C. 12701 et seq.)
 24 CFR Part 92
Regulatory Documents
 Key regulatory documents – HOME
 Written agreement
 Deed restrictions
 HOME Loan Agreement
 PJ-specific HOME compliance manual
 Compliance in HOME Rental Projects: A Guide
for Property Owners
 http://www.hud.gov/offices/cpd/affordableh
ousing/library/modelguides/2009/2009homer
entalpo.cfm
Managing Eligibility in Blended
Occupancy Projects
Managing Eligibility – LIHTC
Tenants must be income-eligible
Household’s anticipated annual gross
income must be at or below the applicable
income limit
 50% or 60%—as elected by the owner on
IRS Form 8609
 Household income calculated according to
Section 8 using the HUD Handbook 4350.3
Managing Eligibility – LIHTC
Tenants must be income-eligible
 Project may have lower income targeting
requirements
 Usually 30% of AMI
 Pay special attention to the set-asides in
the project’s regulatory agreement
Managing Eligibility – LIHTC
Citizenship status
 No requirement to verify citizenship status
 Nor does the program prohibit admission
to a LIHTC unit based on a household
member’s citizenship status
 A combined funding unit with PBRA, PBV,
or PH must comply with citizenship
requirements for its respective program
Managing Eligibility – LIHTC
SSN requirements
 No requirement to verify social security
numbers for the household
 A combined funding unit with PBRA, PBV,
or PH must comply with SSN requirements
for its respective program
Managing Eligibility – LIHTC
Student status
 Units comprised entirely of full-time students
do not qualify as LIHTC units
Managing Eligibility – LIHTC
IRS definition of student
 An individual, who during each of 5 calendar
months during a calendar year in which the
taxable year of the taxpayer begins, is a fulltime student at an educational organization
described in IRC §170. The five calendar
months do not need to be consecutive.
Managing Eligibility
Student status
 Part-time students are okay!
 If, however, the entire household consists of
full-time students, the unit is not considered
an LIHTC unit, unless the student falls in an
exemption category
Managing Eligibility – LIHTC
Exemption categories:
 A student is receiving assistance under Title IV of
the Social Security Act (TANF)
 A student was previously under the care of a state
foster care program
 A student is enrolled in a job training program
receiving assistance under JTPA or similar program
 Household consists of a single parent and his/her
dependents, where neither the single parent nor their
children are dependents of another individual
 Household consists of persons who are married and
eligible to file a joint tax return
Managing Eligibility – LIHTC
Income limits
 Published by HUD each year
 Income limit table to be used is determined by
the Placed In Service date
 The Placed in Service date is the date all
compliance activities begin for a LIHTC
building
 Revised income limits must be implemented
within 45 days of HUD publishing the limits
Managing Eligibility – LIHTC
Income limits
 Beginning in 2009, HUD published separate
income limits for LIHTC projects
 These income limit tables are referred to
as multifamily tax subsidy projects
(MTSP)
Managing Eligibility – LIHTC
Staff/Manager units
If one or more units in a LIHTC project are used for onsite staff, one of the following will apply:
The unit is considered a rental unit
 staff must be a qualified LIHTC household
OR
The unit is considered common area
 Staff does not have to be a qualified LIHTC
household
 Must be full-time
Managing Eligibility – PBRA
Tenants must be income-eligible
 Household’s anticipated annual gross income
must be at or below applicable income limit
 Either 80% or 50% of AMI
 Program and project eligibility must be
determined
 Applicants must be eligible to reside in the
specific project to which they have applied
Managing Eligibility – PBRA
 Three things may affect an applicant’s
eligibility for a particular project:
1.
2.
3.
Extent to which all or some units are
designated for specific family types;
Project-specific occupancy standards,
family size, and the unit sizes available; and
A family’s intention to lease using a housing
choice voucher subsidy
Managing Eligibility
Citizenship status – PBRA, PBV and PH
 No family may receive PBRA, PBV or PH
assistance prior to the affirmative
establishment and verification of eligibility
of at least one family member
Managing Eligibility
Citizenship status – PBRA, PBV and PH
 All applicants must be given notice of the
requirement to submit evidence of
citizenship or eligible immigration status at
the time of application
 All family members, regardless of age, must
declare
Managing Eligibility
Citizenship status – PBRA, PBV, and PH
Each member will be:
 Citizen or national
 Eligible immigrant
 Ineligible noncitizen
Managing Eligibility
 Citizenship – PBRA, PBV and PH
 Households will fall into one of the following categories:
 All members citizens or eligible immigrants
 Some members eligible and some ineligible
(mixed family)
 Receive prorated assistance
 All members are ineligible noncitizens
 Not eligible for assistance
Managing Eligibility
SSN requirements – PBRA, PBV and PH
 All applicants (except for noncontending
members) must disclose and document a
complete and accurate SSN for each
household member, including foster
children, foster adults and live-in aides
Managing Eligibility –
PBRA and PBV
Sole residence requirement
 Tenants receiving PBRA or PBV assistance
must have only one residence and receive
assistance only in that unit and under no
circumstances benefit from multiple
subsidies
Managing Eligibility
Student status – PBRA and PBV
 Assistance cannot be provided to any
individual who is…
 Enrolled as either a part-time or full-time
student at an institution of higher
education for the purpose of obtaining a
degree, certificate, or other program
leading to a recognized educational
credential
Managing Eligibility –
PBRA and PBV
And is…
 Is under the age of 24;
 Is not married;
 Is not a veteran of the U.S. military;
 Does not have a dependent child;
 Is not living with his or her parents who are
receiving Section 8 assistance
Managing Eligibility –
PBRA and PBV
 UNLESS…
 The student is eligible and the student’s
parents (individually or jointly) are income
eligible for the program
63
Managing Eligibility –
PBRA, PBV and PH
Equal Access Final Rule:
 HUD-assisted housing must be made available
without regard to actual or perceived sexual
orientation, gender identity, or marital status
 Administrators and participating owners may
not inquire about the sexual orientation or
gender identity of an applicant or occupant for
the purposes of making eligibility
determinations
Managing Eligibility –
PBRA, PBV and PH
Required denial of admission
 See TSP (PBRA), ACOP (PH), or admin plan
(PBV)
Managing Eligibility –
PBV and PH
Unique to PBV and PH: PIH 2012-10
 If family otherwise eligible, they may
maintain position on waiting list for a period
of time per PHA policy
 If all household members have not
disclosed their SSN when unit becomes
available, the PHA must offer the unit to
the next eligible family on the waiting list
Managing Eligibility – PH
Tenants must be income-eligible
 A PH household’s anticipated annual gross
income must be at or below 80% of AMI
 Income limits are only applied at
admission
Managing Eligibility – PH
Student status
 Student rules in other HUD programs do
NOT apply to PH
 PIH Notice 2005-16 encourages policy for
determining and verifying the eligibility
of full-time college students of nonparental/guardian households
Managing Eligibility – HOME
Tenants must be income-eligible
 Two income limits:
 High HOME Income Limits (80% AMI)
 Low HOME Income Limits (50% AMI)
 All HOME-assisted units must be occupied by
low-income households at or below 80% (AMI)
 PJ determines the definition of annual income
to be used
Managing Eligibility – HOME
Tenants must be income-eligible
 Projects with 5+ HOME-assisted units:
 At least 20% of the units must be rented to
households at or below 50% percent AMI
 These are called the Low HOME income
limits
Managing Eligibility – HOME
Citizenship status
 No requirement to verify citizenship status
 No prohibition of admission based
citizenship status
 Unit with PBRA, PBV, or PH must comply
with citizenship requirements for its
respective program
Managing Eligibility – HOME
SSN requirements
 No requirement to verify social security
numbers for the household
 A combined funding unit with PBRA, PBV,
or PH must comply with citizenship
requirements for its respective program
Consent & Verification – LIHTC
 Tenant Income Certification (TIC) is
required for LIHTC households
 Must be signed by all adult household
members before move-in and at annual
recertification
 Information on TIC similar to 50059/50058
form
 State-specific TIC
Consent & Verification – LIHTC
 Owner must perform due diligence verifying
income
 Due diligence = to go beyond the minimum
 All sources of income and assets must be
verified to establish initial LIHTC eligibility
following the HUD Handbook 4350.3
 Preferred verification method is third-party
verification
Consent & Verification – LIHTC
 Verifications can be no older than 120
days before the effective date of the
tenant income certification (TIC)
 IRS does not require specific
verification forms
 Check with state agency on required
verification forms
Consent & Verification – LIHTC
 Pay special attention to verifying fulltime student status
 The IRS has stated that acceptable methods
of verification include third-party
verifications, oral statements, or a review of
documents submitted by the student
 Check with state agency
Consent & Verification Forms
PBRA, PBV, PH
 HUD-9887 and form HUD-9887-A (PBRA)
and HUD-9886 (PBV & PH)
Each household member age 18 and older
must sign form (head, spouse, cohead
regardless of age)
Regardless of whether they report income
Consent & Verification Forms
PBRA, PBV, PH
 Form HUD-92006, Supplement to
Application for Federally Assisted
Housing, must be provided to
households at the time of application
 The household is not required to provide
the information
Verification – PBRA
SSN verification
Social Security card
 Original document from SSA
 Original document issued by a federal or
state agency
And more…
Verification
PBV and PH
 SSN verification
 PHA must accept any of the following:
 SS card
 SSA-issued document
 Original document issued by federal, state,
or local government agency
 Containing name & SSN
80
80
Verification Timeframes– PBRA
 Verifications for eligibility are valid for
120 days from the date of receipt by the
owner
Verification Timeframes – PBV
 PHAs must obtain verification of
eligibility no more than 60 days before
initial issuance of a voucher
Verification Timeframes – PH
 Verifications for eligibility are generally
valid for no more than 90 days
 Public Housing Occupancy Guidebook
Consent & Verification – HOME
 The HOME program requires verification
of household income to determine
program eligibility
 Applicant/tenant self-certification is not
allowed as a verification method to
determine program eligibility, neither is a
certification from another program
Check with PJ on required verification forms
Consent & Verification – HOME
 Owners must obtain verification of
eligibility no more than 6 months before
executing a HOME lease agreement
 Verifications used for move-in must be from
source documents
 Can’t use form HUD-50059 or HUD-50058
Consent & Verification –
Comparison
Most restrictive program wins!
 LIHTC
 Verifications can be no older
than 120 days before the
effective date of the tenant
income certification (TIC)
 PBRA
 Verifications for eligibility are
valid for 120 days from the
date of receipt by the owner
 PBV
 PHAs must obtain verification of
eligibility no more than 60 days
before initial issuance of a voucher
 PH
 Verifications for eligibility are
generally valid for no more than 90
days
 Public Housing Occupancy
Guidebook
 HOME
 Owners must obtain verification of
eligibility no more than 6 months
before executing a HOME lease
agreement
Determining Rents
Rents – LIHTC
 Rents aren’t based on a percentage of
income, but owners must determine the
household’s gross annual income before
move-in following HUD Handbook 4350.3
 And annually in certain LIHTC projects
 Income is about eligibility, not about rent
Rents – LIHTC
 Unit rent determination
 Unit rents are set by project owner
 Unit rent is the rent paid by the LIHTC
household
 Unit rent + utility allowance cannot exceed
HUD published LIHTC rent limits
Rents – LIHTC
 Unit rent determination
 Rents over LIHTC limit cannot be charged
except for:
 Section 8 participants – PBRA, PBV or
HCV – as long as the income is based on
HUD requirements and there is a HAP
contract and the owner receives subsidy
on behalf of a participant
Rents – LIHTC
 Utility allowances
 Unit rent + utility allowance cannot exceed HUD
published LIHTC rent limits
 Included if tenant pays for any utilities
 Owner can choose from (check with state
agency for fee, if any):
 PHA utility allowance
 Local utility allowance estimate
 HUD utility schedule model
 Engineering consumption model
Rents – LIHTC
 Once a unit is out of compliance with rent
limits, it’s out of compliance for the rest of
the owner’s tax year!
 Example: A unit out of compliance on
April 2, 2012 will remain out of
compliance until January 1, 2013
Rents - PBRA
 Rents are based on a percentage of
income
 HUD Handbook 4350.3 Chapter 5
 TTP – UA = household rent
 HAP is amount owner bills HUD for each
month, difference between TTP and gross rent
 Reported on 50059
Rents – PBRA
Unit rent determination
 Project rent is established and approved by
HUD or contract administrator
Rents – PBRA
Utility allowances
Estimate of average
monthly utility bills
No uniform guidelines as
to how UA should be
calculated
Check with HUD or
CA
Varies between HUD
offices and CA
Rents – PBV
 Rents are based on a percentage of
income
 Family income determination
 Follows HCV program rules
 TTP – UA = tenant rent
 HAP is amount PHA pays owner each
month- differs by family
 Reported on 50058
Rents – PBV
 Unit rent determination
 Established at beginning of HAPC term
 Owner may request increases
Rents – PBV
 Utility allowances
 Established and maintained by PHA
 For tenant-paid utilities
Rents – PH
 Family income determination
 Rent is income-based or flat
 TTP – UA (if any)= tenant rent
 Reported on 50058
Rents – PH
Unit rent determination
Flat rent and income-based rent
Rents – PH
Utility allowances
 PHA established
 Any unit for which family pays utilities
 Flat rent families will not have a UA applied to
their rent
Rents – HOME
Rents aren’t based on a percentage of
income, but owners must determine the
household’s gross annual income before
move-in using source documentation
PJ determines the definition of annual
income
Rents – HOME
 Unit rent determination
Unit rents established by owner
Unit rents must be approved by the PJ
Unit rent + utility allowance cannot exceed
HUD published rent limits:
Low HOME
High HOME
Rents – HOME
Low HOME Rent – Maximum amount of rent that can
be charged to very-low income (50%) households
High HOME Rent – Maximum amount of rent that can
be charged to low-income (80%) households
Rents – HOME
Unit rent determination
Units with HOME + LIHTC
• Use the LOWER of the HOME or the LIHTC
maximum rent amounts
• Remember to compare the utility allowance
schedules if using two separate utility
allowances
Rents – HOME
Unit rent determination
Units with HOME + PBRA that are identified as Low
HOME may exceed HUD published Low HOME rent
limits if:
1. The household is VLI (50% AMI); AND
2. The household’s tenant paid rent does not
exceed 30% of the household’s adjusted
income
If the above is true, maximum Low HOME rent =
Tenant paid rent + Project based subsidy
Rents – HOME
Unit rent determination
Properties with HOME + HCV and/or PBV
 Maximum unit rent cannot exceed HUD
published rent limits for Low and High
HOME
 Tenant paid rent + HAP cannot exceed
HUD published rent limits
Rents – HOME
 Utility allowances
 Provided by PJ
 May be different than
LIHTC utility
allowance
Managing Eligibility in Blended
Occupancy Projects
Bottom line
 Income eligibility varies by program. Just because a family is
eligible under one program, does not mean they are
automatically eligible under another
 Rent limits vary by program
 Student rules in LIHTC and HUD programs are not identical
 Only PBRA, PBV and PH have SSN and citizenship
requirements
 Utility allowances vary by program
Eligibility should be determined according to the most
restrictive program
Thank you for participating in
today’s Housing Help Session!
 Hope to see you
again!