News

HUD to Survey Residents as Part of the NSPIRE Process

The Department of Housing and Urban Development (HUD) will be conducting surveys with residents whose homes are assessed using the new NSPIRE inspection protocol. These surveys aim to pinpoint issues within the inspection process and steer HUD's initiatives to enhance the overall living conditions and satisfaction of residents. This survey seeks to understand residents' perspectives based on their experiences with the physical inspections, whether carried out by federal HUD/REAC inspectors or HUD-contracted inspectors, specifically for those residences subjected to a REAC physical evaluation. Only residents who have had their units inspected will receive the survey. The survey will be brief, taking about five minutes to complete, and will include the following questions: Whether the resident was present during the inspection; The resident's trust in HUD's provision of safe and habitable housing; The resident's level of satisfaction with their current housing conditions; The resident's level of satisfaction with the HUD inspection process. For the latter three questions, residents will express their level of agreement or disagreement on a five-point scale, from "Strongly Agree" to "Strongly Disagree." Additionally, residents will have the chance to share further comments. These remarks could prompt HUD to undertake further inspections if the feedback suggests significant concerns with the property's condition. Under the NSPIRE program, a random selection of units within a property will be inspected, along with any five units nominated by a resident organization. Post-inspection, inspectors will distribute survey flyers in the homes they've assessed. If the kitchen counter isn't an option, flyers will be placed in another prominent location within the unit. These flyers will provide a link or QR code to the survey site, offering residents a voluntary and confidential means to participate. It's important to note that the NSPIRE resident survey is distinct from previous surveys as its findings will not influence HUD's evaluation of multifamily sites. The data collected through these surveys will not contribute to the NSPIRE scoring system used to determine the overall condition, health, and safety of the properties and units inspected.

HUD Flexes VAWA Enforcement Muscle

The Department of Housing & Urban Development (HUD) has announced settlements with two housing providers, resolving allegations that they denied housing opportunities to two women who were victims of dating violence and stalking. These are the first enforcement actions by HUD against property owners for VAWA-related violations. Under the Violence Against Women Reauthorization Act of 2022 (VAWA 2022), HUD can enforce VAWA with the same rights and remedies as the agency enforces the Fair Housing Act. The two agreements provide monetary damages to the victims, priority placement on the waiting list for available units, policy changes, staff training, and operational changes. In the first case, HUD found that a tenant with a Housing Choice Voucher had her rights violated under VAWA when she requested to relocate mid-lease as an emergency transfer after being stalked by a former partner. The woman alleged that the PHA demanded confusing and contradictory documentation that it was not permitted to request under VAWA, threatened to revoke her voucher, denied her request to extend her voucher, and stopped paying its portion of the rent while she prepared to move to protect her safety. The PHA policies were not compliant with VAWA requirements, including policies for documenting status as a VAWA survivor in general. The Agency also did not have an emergency transfer plan. As part of the settlement, the PHA will adopt and implement VAWA-compliant policies, including the development of an emergency transfer plan. The Agency will also hire outside experts to provide VAWA training to staff and will pay the victim a monetary settlement. The second case involves a California management company. The property under management received HOME funds and has Low-Income Housing Tax Credits (LIHTC). In this case, the property manager violated the victim s rights by denying her application due to a history of violations of the terms or prior rental agreements that were related to her being a victim of dating violence. Management admitted that they failed to accompany the denial letter with a copy of VAWA rights, as required by law. The manager also did not advise the applicant about how she might appeal the denial. Under the terms of the agreement, the housing provider will pay the victim a monetary settlement, place her on the top of the waitlist for the next available unit at two properties, notify her in writing when such a unit becomes available, revise their policies and procedures to comply with VAWA and protect the VAWA rights of applicants and tenants. The company must also create the position of VAWA Rights Coordinator to handle VAWA matters and require employees to complete annual VAWA training. Bottom Line The two first-of-its-kind cases demonstrate the importance of all owners and managers of properties subject to VAWA to fully understand the requirements of the law. Virtually all HUD-assisted properties are subject to the law, as are properties assisted by the Rural Development Service and those with Low-Income Housing Tax Credits. Since HUD will now be enforcing VAWA in the same manner as the Fair Housing Act, annual VAWA training takes on the same importance as annual fair housing training.

A. J. Johnson to Provide Live Webinar on Assistance Animals in Multifamily Housing

A. J. Johnson will be conducting a one-hour webinar on January 24, 2024, on Assistance Animals in Multifamily Housing - Avoiding Fair Housing Violations. The Webinar will begin at 1:00 PM Eastern Time. Understanding Fair Housing Law concerning assistance animals is crucial for several reasons: Fair housing law ensures that individuals with disabilities have equal access to housing, preventing discrimination. Assistance animals are not pets but are necessary for the well-being of their owners. Landlords and housing providers must comply with these laws to avoid legal repercussions. Ignorance of the law is not a defense. The law clarifies the obligations of housing providers to make reasonable accommodations for assistance animals, even in pet-free housing. It promotes awareness and sensitivity towards the needs of individuals with disabilities, fostering a more inclusive and supportive community. Understanding these laws helps prevent misuse of the system by those who do not genuinely require assistance animals, ensuring resources and accommodations are available for those who truly need them. This one-hour live webinar will provide the information necessary for owners to comply with this complex area of fair housing law. It will cover the difference between service and support animals, how to verify the need for an assistance animal (including a detailed discussion of the "online" verification services), and what types of animals are acceptable as assistance animals. There will be plenty of time for Q&A and at the end of the session, attendees will be more confident when dealing with requests for assistance animals. Those interested in participating in the Webinar may register on the A. J. Johnson Consulting Services website (www.ajjcs.net) under "Training."

HUD HOTMA Rules Update Verification Requirements

Introduction The U.S. Department of Housing and Urban Development (HUD) has released Notice H 2013-10, which expands upon the Final Rule for implementing the Housing Opportunity Through Modernization Act (HOTMA). This final rule makes some changes to the way managers of HUD-assisted housing will verify eligibility-related information for HUD-assisted properties. Consent to Release Forms The final HOTMA rule changes the requirements relating to the signing of Authorization for Release of Information (Forms HUD-9886/9887). Under the final rule, all applicants age 18 and over must sign the consent form at admission and participants must sign the consent form no later than their next interim or regularly scheduled income reexamination. After an applicant or participant has signed and submitted a consent form on or after January 1, 2024, they do not need to sign and submit subsequent consent forms at the next interim or regularly scheduled income reexamination except under the following circumstances: When any person 18 years or older becomes a member of the family; When a member of the family turns 18 years of age; and As required by HUD or the PHA in administrative instructions. Executed consent forms will remain effective until the family is denied assistance, the assistance is terminated, or if the family provides written notification to the owner revoking consent. If a family leaves a HUD program, the assistance is terminated, and the signed consent forms will no longer be in effect. HUD is updating the form HUD-9886-A and 9887 to conform to the final rule. EIV Use The regulation reminds owners the EIV must be used to verify tenant employment and income at annual and streamlined reexaminations of family composition and income. However, Owners are no longer required to use EIV to verify tenant employment and income information during an interim reexamination. Owners have the discretion to use EIV reports at interim reexaminations, but such a policy must be stated in written EIV Policies & Procedures. Determination of Income Using Other Means-Tested Public Assistance (i.e., "Safe Harbor") Owners may determine a family s annual income, including income from assets, before the application of any deductions based on income determinations made within the previous 12-month period, using income determinations from the following types of means-tested federal public assistance programs: Temporary Assistance for Needy Families ("TANF"); Medicaid; Supplemental Nutrition Assistance Program ("SNAP"); The Earned Income Tax Credit; The Low Income Housing Tax Credit; Special Supplemental Nutrition Program for Women, Infants, and Children; Supplemental Security Income (SSI); Other HUD-administered programs; Other means-tested forms of federal public assistance for which HUD has established a memorandum of understanding; and Other federal benefit determinations made by other means-tested federal programs that HUD determines to have comparable reliability and announces through a Federal Register notice. All means-tested verifications must utilize third-party verification. HUD clarifies in this notice that the verification will be considered acceptable if the documentation meets the criteria that the income determination was made within the 12 months before the receipt of the verification by the Owner. The safe harbor documentation will be considered acceptable if any of the following dates fall into the 12 months prior to the receipt of the documentation by the Owner: Income determination effective date; Program administrator s signature date; Family s signature date; Report effective date; or Other report-specific dates that verify the income determination date. Safe harbor verifications may only be used to determine gross annual income - not adjusted income. Verification Hierarchy HUD has developed a hierarchy that describes verification documentation from most acceptable to least acceptable, as follows: Upfront Income Verification (UIV), using HUD s EIV system; Upfront Income Verification using a non-EIV system (e.g., The Work Number, web-based state benefits, etc.); Written, third-party verification from the source, also known as "tenant-provided verification" or EIV plus Self-Certification. Owners must use written, third-party verification when the income type is not available in EIV (e.g., self-employment, GoFundMe accounts, general public assistance, VA benefits, etc.); Examples are pay stubs, payroll summary reports, employer hire letters, SSA benefit letters, bank statements, child support payment stubs, welfare benefit letters, and unemployment monetary benefit notices. When pay stubs are used, a minimum of two consecutive pay stubs are required. However, for new income sources or when two pay stubs are not available, traditional, third-party verification or the best available information should be used. When verification of assets is required, owners are required to obtain a minimum of one statement that reflects the current balance of banking/financial accounts. Note that a six-month average balance for checking accounts is no longer required Written, third-party verification form directly from the income source; Oral Third-Party Verification; and Self-certification (not third-party verification). Owners and property managers should note that these requirements apply only to HUD projects. The Rural Development Service (RD) and Housing Finance Agencies (HFAs) have complete discretion concerning verification requirements and the procedures outlined here may not be acceptable to those agencies.

HOTMA Makes Significant Changes to the Handling of Interim Reexaminations at HUD Properties

Introduction The U.S. Department of Housing and Urban Development (HUD) has released Notice H 2013-10, which expands upon the Final Rule for implementing the Housing Opportunity Through Modernization Act (HOTMA). This final rule makes significant changes to the way managers of HUD-assisted housing will process interim reexaminations. Basics of the Rule Change A family may request an interim determination of family income or composition because of any changes since the last determination. Project owners must conduct interims within a reasonable period of time after the family request or when the Owner becomes aware of a change in the family s adjusted income that must be processed in accordance with the final rule. While owners have some discretion in determining a "reasonable time," interim reexaminations should generally be conducted no more than 30 days after the owner becomes aware of the changes. Decreases in Adjusted Income A family may request an interim determination of income for any change in income or family composition. However, the owner may decline to conduct an interim if the owner estimates that the adjusted income will decrease by less than 10 percent of the annual adjusted income. If owners select a threshold lower than 10 percent, the lower percentage threshold must be included in the ACOP, Administrative Plan, or Tenant Selection Plan, as applicable. HUD has made some exceptions to the 10 percent threshold and applies a zero percent threshold in certain circumstances: (1) If there is a decrease in family size due to the death or permanent move-out from the assisted unit of a family member during the period since the family s last reexamination that results in a decrease in adjusted income of any amount. If there is no change in adjusted income as a result of the decrease in family size, then a non-interim transaction is processed instead of an interim reexamination. This zero percent threshold applies only to decreases in adjusted income due to a decrease in family size. If the move-out of the family member results in an increase in annual adjusted income, the owner will process the removal of the member as a non-interim transaction without making changes to the family s annual adjusted income. Owners are not permitted to establish a dollar-figure threshold amount instead of a percentage threshold. Owners may establish policies to round calculated percentage decreases up or down to the nearest unit (e.g., a calculated decrease of 9.5% may be rounded up to 10%). Increases in Adjusted Income Owners must conduct an interim reexamination of family income when the family s adjusted income increases by 10 percent or more, with the following exceptions: (1) owners may not consider any increases in earned income when determining whether to conduct an interim unless the family has previously received an interim reduction during the same reexamination cycle, and (2) owners may choose not to conduct an interim reexamination during the last three months of a certification period if a family reports an increase in income with three months of the next annual reexamination effective date. Note: Families who delay reporting income increases until the last three months of their certification period may be subject to retroactive rent increases. Owners may not establish a policy of conducting interim reexaminations for increases in annual adjusted income of less than 10 percent. When a family previously received an interim reexamination for a decrease in annual adjusted income during the same annual cycle, an owner has the discretion to consider or ignore a subsequent increase in earned income for the purpose of conducting an interim reexamination. When an increase in income of any size is reported by a family, it is a recommended best practice for the owner to note the reported increase in the tenant file. If a series of smaller reported increases in adjusted income result in a cumulative increase of 10 percent or more, an interim reexamination is required. Bottom Line Project owners must process interim reexaminations of family income or composition if there's a significant change since the last check. The interim should be done within 30 days of becoming aware of the change. Decreases in income warrant an interim if over 10%, with certain exceptions allowing a 0% threshold. For increases, an interim is required for a 10% rise in adjusted income unless a reduction has occurred in the same cycle. Owners should document all reported income changes, and cumulatively, a 10% increase triggers an interim reexamination.

A. J. Johnson to Host Live Webinar on Interviewing Skills for Affordable Housing Managers

A. J. Johnson will be conducting a webinar on December 6, 2023, on Interviewing Skills for Affordable Housing Managers.  The Webinar will be held from 1:00 PM to 4:00 PM Eastern time. One of the most important skills any affordable housing manager can possess is the ability to interview applicants and residents and obtain the information required to determine eligibility - this is also one of the greatest weaknesses of most affordable housing managers. This training has been developed to address that weakness. This three-hour session focuses on the interview process and provides concepts and tools that will aid managers as they conduct their interviews. Techniques apply to all interview settings including initial eligibility interviews, interim certifications, and annual recertifications. The primary emphasis is on the initial eligibility interview since it is so critical to the housing process. The skills taught during this session will also assist managers in detecting fraud and dealing with third parties when resolving discrepancies. Those interested in participating in the Webinar may register on the A. J. Johnson Consulting Services website (www.ajjcs.net) under "Training Schedule."

HUD Provides Significant Clarification Regarding Income in HOTMA Final Rule

Introduction The U.S. Department of Housing and Urban Development (HUD) has released Notice H 2023-10, which expands upon the Final Rule for implementing the Housing Opportunity Through Modernization Act (HOTMA). This final rule provides clarification regarding how income is determined for purposes of HUD programs and other programs that must follow HUD rules relative to the determination of income. Annual Income Annual income includes all amounts received from all sources by each member of the family who is 18 years of age or older, the head of household, or spouse of the head of household, in addition to unearned income received by or on behalf of each dependent who is under 18 years of age. Annual income does not include amounts specifically excluded in 24 CFR 5.609. HUD clarifies that annual income includes "all amounts received," not the amount that a family may be legally entitled to receive but which they do not receive. For example, a family s child support or alimony income must be based on payments received, not the amounts to which a family is entitled by court or agency orders. For this reason, a copy of a court order or other written payment agreement alone may not be sufficient verification of amounts received by a family. Annual income also includes all actual anticipated income from assets even if the asset is excluded from net family assets but the income from the asset is not otherwise excluded. Imputed returns on net family assets are included in annual income only when net family assets exceed $50,000, and actual asset income cannot be calculated for all assets. Day Laborers A day laborer is defined as an individual hired and paid one day at a time without an agreement that the individual will be hired or work again in the future. Income earned as a day laborer is considered "earned" income and must be included in the determination of income unless specifically excluded by federal regulation (e.g., earnings of full-time students in excess of the dependent deduction). Independent Contractor An independent contractor is an individual who qualifies as an independent contractor instead of an employee in accordance with IRS regulations and whose earnings are subject to self-employment tax. In general, an individual is an independent contractor if they have the right to control or direct only the conduct of the work. For example, while instructions and route information are generally provided, third-party delivery and transportation service providers are considered independent contractors unless state law dictates otherwise. In addition, "gig workers," such as babysitters, landscapers, rideshare drivers, and house cleaners, typically fall into the category of independent contractors. Income earned as an independent contractor is considered "earned" income and must be included in the determination of income unless specifically excluded by federal regulation (e.g., earnings of full-time students in excess of the dependent deduction). Seasonal Worker A seasonal worker is defined as an individual who is: 1) hired into a short-term position (e.g., for which the customary employment period for the job is six months or less); and 2) the employment begins about the same time each year (such as summer or winter). Examples of seasonal work include employment limited to holidays or agricultural seasons. Seasonal work may include but is not limited to employment as a lifeguard, ballpark vendor, or snowplow driver. Income earned as a seasonal worker is considered "earned" income and must be included in the determination of income unless specifically excluded by federal regulation. In conclusion, Notice H 2023-10 and the Final Rule for the Housing Opportunity Through Modernization Act provide essential guidelines for determining income within HUD programs. These clarifications serve to ensure a fair and accurate assessment of income, capturing the complexities of modern work arrangements from day laborers to independent contractors and seasonal workers. By including actual received income and anticipating earnings from assets, HUD aims to streamline the process, promote transparency, and provide consistency across the board. This approach not only supports the equitable distribution of housing assistance but also reflects the evolving nature of income in a gig economy. As HUD continues to refine its policies, these measures are a step toward modernizing housing opportunities and upholding the fundamental principle that everyone deserves access to affordable housing.

A. J. Johnson Partners with Mid-Atlantic AHMA for December Training on Affordable Housing

During the month of December 2023, A. J. Johnson will be partnering with the MidAtlantic Affordable Housing Management Association for two live webinar training sessions intended for real estate professionals, particularly those in the affordable multifamily housing field. Following the webinars, AJ will be providing a review of testable areas and in-person administration of the Housing Credit Certified Professional (HCCP ) exam.  The following sessions will be presented: December 12: Intermediate LIHTC Compliance - Designed for more experienced managers, supervisory personnel, investment asset managers, and compliance specialists, this program expands on the information covered in the Basics of Tax Credit Site Management. A more in-depth discussion of income verification issues is included as well as a discussion of minimum set-aside issues (including the Average Income Minimum Set-Aside), optional fees, and use of common areas. The Available Unit Rule is covered in great detail, as are the requirements for units occupied by students. Attendees will also learn the requirements relating to setting rents at a tax-credit property. This course contains some practice problems but is more discussion-oriented than the Basic course. A calculator is required for this course. December 13: Advanced LIHTC Compliance - This full-day training is intended for senior management staff, developers, corporate finance officers, and others involved in decision-making with regard to how LIHTC deals are structured. This training covers complex issues such as eligible and qualified basis, applicable fraction, credit calculation (including first-year calculation), placed-in-service issues, rehab projects, tax-exempt bonds, projects with HOME funds, Next Available Unit Rule, employee units, mixed-income properties, the Average Income Minimum Set-Aside, vacant unit rule, and dealing effectively with State Agencies. Individuals who take both two days of training will be provided with study materials and a practice exam to assist in preparation for the HCCP exam, to be administered on December 15. December 14: Review of testable areas and administration of the Housing Credit Certified Professional (HCCP ) exam (In-person exam in Richmond, VA). Following the two days of intensive and comprehensive LIHTC training, AJ will provide a review of program requirements and will administer the HCCP exam in person. These sessions are part of the year-long collaboration between A. J. Johnson and MidAtlantic AHMA that is designed to provide affordable housing professionals with the knowledge needed to effectively manage the complex requirements of the various agencies overseeing these programs. Persons interested in any (or all) of these training sessions may register by visiting either www.ajjcs.net or https://www.mid-atlanticahma.org.