News

Ohio Considering New Requirements for Tax Credit Market Studies

The Ohio Housing Finance Agency (OHFA) is considering the adoption of new requirements for tax credit project market studies. The changes would include new procedures that will demand more comprehensive conclusions regarding project feasibility. Analysts may also be required to develop their own recommended tax credit rents. Another change would require analysts to determine capture and penetration rates using a consistent formula, although the analyst could use a different formula if justified. There is no set timeframe for enacting the proposed guidelines.

HUD Notice Regarding Protection of Tenant Privacy

HUD has recently restated its intention to punish owners and managers of HUD assisted housing who fail to adequately safeguard the personally identifiable information (PII) of applicants and tenants in HUD assisted properties. Notice PIH 2010-15(HA), issued on May 6, 2010, provides details on HUD requirements regarding privacy protection and should be reviewed by all operators of HUD assisted housing. The Notice provides guidance on protecting sensitive privacy information, and outlines the steps that contractors and third party business partners should take to ensure protection of sensitive information. Among the steps stipulated in the Notice: Collect only PII that is needed; Manage access to PII by sharing it only with personnel with a "need to know." Be careful when discussing PII on the phone, and never leave messages containing sensitive PII on voicemail; Protect hard copy and electronic files containing PII; Protect electronic transmissions of sensitive PII via fax, email, etc; Protect hard copy transmissions of files containing PII; and Have a solid program in place relative to records management, retention and disposition. Details of these requirements are contained in the Notice. All owners/agents of HUD assisted properties should obtain a copy of the Notice and abide by its requirements.

HUD Develops Self-Certification for Owners to Show Eligibility for Weatherization Assistance Program

HUD has developed a self-certification procedure enabling owners of HUD-assisted multifamily housing projects to show eligibility for the Department of Energy (DOE) Weatherization Assistance Program (WAP). On January 25, 2010, DOE published a regulation that was intended to reduce the review burden related to WAP income eligibility for HUD properties. The initial list of properties provided by HUD to DOE included only properties for which HUD was able to verify tenant income information based on available data sets. Due to HUD s limited data sets, the list omitted multi-building properties for which HUD was unable to match tenant addresses to individual buildings to determine in income eligibility requirements were met. Under program rules, at least 66 percent of the units in each building (50 percent for two to four unit buildings) must have incomes below 200 percent of the poverty level. The revised policy relies on certified annual income records and building information provided by property owners. An owner or agent must sign a self-certification attesting that the owner or agent maintains certified income records for households at the property, has reviewed the certified income records, and has determined that residents in at least 66 percent of the units in each building have certified incomes at or below 200 percent of the poverty level based on household size. Once HUD reviews and accepts the owner provided documentation, the property will be added to the supplemental list of properties eligible to participate in the WAP program. Properties assisted by HUD, Rural Development, and those with Low-Income Housing Tax Credits are eligible to participate in the program. For additional information, refer to DOE Weatherization Program Notice 10-15, Effective date March 2, 2010.

Make Sure Your Section 8 Fact Sheet is Up-to-Date

HUD issued an updated Section 8 Fact Sheet in September 2010, but HUD noted in a TRACS conference call recently that many owners are still using the Fact Sheet from July 2007. There are differences in the two fact sheets that affect the rent calculation for Section 8 properties. The 2007 fact sheet excludes from income all scholarships funded under Title IV of the Higher Education Act of 1965. The revised fact sheet reflects the change in HUD rules that now requires counting any amount of educational assistance in excess of tuition as income. If you have not done so already, get rid of the 2007 fact sheet and replace it with the 2010 edition. The 2010 form may be downloaded from http://www.hud.gov/offices/fheo/promotingfh/11-Fact-Sheet-S-8-English.pdf.

Court Confirms that Individuals may be Held Liable for Fair Housing Violations

The U.S. District Court for the Southern District of New York has held that anyone who commits a prohibited act of discrimination in rental housing may be held personally liable under the Fair Housing Act, regardless of whether that person is an employee or agent of the owner or management company. To quote the decision, "This court adopts the position that anyone who commits an act set forth in the statute is liable." [Fair Housing Justice Center, Inc. v. Broadway Crescent Realty, Inc., No. 10 Civ. 34 (CM), 2011 WL 856095 (S.D.N.Y), March 9, 2011]. This reaffirms the importance of professional fair housing training for all those who are engaged in the rental of housing.

HUD General Counsel Opinion: Medically Prescribed Marijuana Not a Reasonable Accommodation

According to a January 20, 2011 HUD Office of General Counsel (OGC) legal opinion, PHAs and owners of federally assisted housing may not permit disabled current or prospective tenants to grow, use, possess, or distribute medical marijuana, even if permitted under state law. Medical marijuana is legal in 15 states and the District of Columbia, but is illegal under federal law (the Federal Controlled Substances Act.) The OGC said that persons who currently are using illegal drugs, including medical marijuana, are categorically disqualified from protection under the disability definition provisions of Section 504 of the Rehabilitation Act of 1973 and the Americans with Disabilities Act (ADA). The opinion also states that HUD fair housing investigators should not issue determinations of reasonable cause for violation of the Fair Housing Act to owners who refuse to grant such an accommodation. The opinion left open the issue of whether current users of marijuana should be evicted, leaving that up to individual owners. In addressing the Fair Housing Act specifically, OGC stated that accommodation requests for use of medical marijuana may be denied because it would sanction violations of federal criminal law and thus would constitute a fundamental alteration of project operations.

HUD Proposes Expanded Protections for Applicants & Residents at HUD Properties

On January 20, 2011, HUD issued a proposed rule clarifying that all otherwise eligible households, regardless of marital status, sexual orientation, or gender identity, have an equal opportunity to participate in HUD programs. This rule would also expand the definition of familial status to include anyone acting in the role of a parent for an individual under age 18, including same-sex parents or unmarried couples. The Rule also Prohibits lenders from using sexual orientation or gender identity as a basis for rejecting a borrower s application for FHA-insured financing; and Prohibits owners and operators of HUD-assisted housing, or housing whose financing is insured by HUD, from inquiring about the sexual orientation or gender identity of an applicant for, or occupant of, a dwelling. This rule is being proposed in response to the failure of Congress to pass the Housing Opportunities Made Equal (HOME) Act in 2010, which would have added these groups as protected classes under the Fair Housing Act. You may read the proposed rule at http://portal.hud.gov/hudportal/documents/huddoc?id=LGBTPR.pdf If you wish to comment on the rule, you may do so on line at http://www.regulations.gov and reference docket # FR 5359-P-01. I will keep you informed as this proposed rule moves through the regulatory process.

Program Relief for Flood & Tornado Victims

State Housing Finance Agencies in Alabama, Tennessee, Georgia, and Mississippi are relying on IRS Revenue Procedure 2007-54 to provide relief for owners and tenants affected by recent flooding and tornados. The Procedure provides temporary relief from carryover allocation rules, recapture, and compliance monitoring requirements for LIHTC projects damaged in presidentially declared disaster areas. The Procedure also permits owners of LIHTC properties to temporally housed displaced low-income individuals. Owners in these states should contact their State Agency for additional information on the requirements within those states.