Test Slide One - Nan McKay and Associates
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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!