News

A. J. Johnson Partners with Mid-Atlantic AHMA for May Training on Basic LIHTC Compliance and Interviewing Skills for Managers

During the month of May 2021, A. J. Johnson will be partnering with the MidAtlantic Affordable Housing Management Association for two live webinars intended for real estate professionals, particularly those in the affordable multifamily housing field. The following live webinars will be presented: May 12: Basic LIHTC Compliance - This training is designed primarily for site managers and investment asset managers responsible for site-related asset management and is especially beneficial to those managers who are relatively inexperienced in the tax credit program. It covers all aspects of credit related to on-site management, including the applicant interview process, the determination of resident eligibility (income and student issues), handling recertification, setting rents - including a full review of utility allowance requirements - lease issues, and the importance of maintaining the property. The training includes problems and questions designed to ensure that students are fully comprehending the material. May 25: Interviewing Techniques and Skills for Affordable Housing Managers -  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 in dealing with third parties when resolving discrepancies. 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.

HUD Confirms Income Exclusions

Unemployment Benefits & Child Tax Credit The 2021 Consolidated Appropriations Act (2021 Appropriations) and the American Rescue Plan of 2021 (ARP) amended three provisions to strengthen and extend unemployment benefits in the CARES Act and the ARP provides a monthly payment from the enhanced child tax credit that will begin being distributed to families in July 2021. HUD has determined that the $300/week unemployment benefit and the upcoming monthly child tax credit payment are to be excluded from the annual income calculation.   For properties where the household income affects rents, if a tenant s income was not calculated in accordance with the guidance below, owners/agents must correct the form-HUD 50059. Section 2104: Federal Pandemic Unemployment Compensation (FPUC) in the 2021 Appropriations and the ARP provides eligible individuals who are collecting regular unemployment insurance an additional $300/week. Owners/agents shall exclude this unemployment benefit from the annual income calculation on the basis that it is temporary income. Section 7527A: Advance Payment of Child Tax Credit in the ARP provides a monthly payment of up to $300/week from July 2021 through December 2021. Owners/agents shall exclude the child tax credit on the basis that it is excludable income under 26 USC 6409. This announcement is important, especially for our low-income families who have been hit the hardest by the pandemic. To promote housing stability, owners/agents can remind residents that the $300/week unemployment benefit and child tax credit are not included in the annual calculation of income, which could be used as a resource to help with unpaid rent.

HUD Secretary Announces Increase in REAC Inspections

On April 23, 2021, HUD Secretary Marcia Fudge announced that effective June 1, 2021, HUD will substantially increase housing inspections for properties subject to REAC. Within a few days - as early as this week - HUD will formally notify properties to begin scheduling inspections. REAC will conduct inspections using protocols developed by the Centers for Disease Control & Prevention (CDC). In addition, HUD will provide properties with more than the regular 14-day notice of REAC inspections in order to give PHAs, owners, and property managers adequate time to prepare. For the Housing Choice Voucher program, HUD will extend current alternative requirements around housing quality standards inspections for properties and units under this program to balance the goal of helping households obtain housing quickly while ensuring that units meet quality standards. The HUD approach will include facilitating COVID-19 vaccine access to inspectors and PHA staff as well as to residents. Properties that are subject to REAC inspections and that had scores below 60 for their most recent REAC inspection should expect to be given high priority in this expanded effort to re-start the REAC inspection process.

A. J. Johnson to Offer Webinar on LIHTC Acquisition/Rehab Issues

A. J. Johnson will be conducting a webinar on May 6, 2021, on Acquisition/Rehab of Low-Income Housing Tax Credit Projects - Critical Issues for Success. The Webinar will be held from 1:00 PM to 3:00 PM Eastern time. This two-hour session reviews the issues that are critical to the success of any LIHTC acquisition/rehab project. The training focuses on tenant eligibility, unit qualification, and first-year credit delivery. There will be a full discussion of determining the first year applicable fraction, differentiating between the acquisition credit and rehab credit, transferring households between units during rehab, temporary relocation, the timing of resident qualifications, the meaning of the "safe-harbor" rule, resyndication and previously qualified households, and 8609 issues. Those interested in participating in the Webinar may register on the A. J. Johnson Consulting Services website (www.ajjcs.net) under "Training Schedule."

CDC Updates FAQS on Eviction Moratorium

On April 14, 2021, the Centers for Disease Control and Prevention (CDC) updated the Frequently Asked Questions (FAQS) regarding the CDC order to temporarily halt residential evictions to assist in preventing the spread of COVID-19. The FAQs are non-binding and are meant to outline the CDC position on the moratorium, as well as that of other agencies. The order was first issued on September 4, 2020, and has been extended a number of times, most recently on March 29, 2021. The order expires (unless extended again) on June 30, 2021. The past position of the CDC was that landlords were not required to inform tenants of the order, or to assist residents in using the order to avoid eviction. The most significant change in this update is guidance that federal law may require landlords to make their tenants aware of the Order. Specifically, the Update explains that, although the Order itself does not contain a notice requirement, the Fair Debt Collection Practices Act ("FDCPA") and the Federal Trade Commission Act ("FTCA") may require landlords or their agents to make their tenants aware of the order and that, under these statutes, evicting tenants in violation of the CDC, state, or local moratoria or evicting or threatening to evict without informing a tenant of their legal rights under such moratoria, may violate prohibitions against deceptive and unfair practices. The CDC also notes that the Consumer Financial Protection Bureau ("CFPB") and the Federal Trade Commission ("FTC") issued a joint statement in March stating that evicting tenants in violation of the CDC, state, or local moratoria or evicting or threatening to evict tenants without informing them of their legal rights under such moratoria may violate prohibitions against deceptive and unfair practices, including the FDCPA and the FTCA. Also, on April 19, 2021, the CFPB issued an interim final rule, effective May 3, 2021, that would require "debt collectors" under the FDCPA, to notify tenants of the CDC moratorium or other applicable moratoria. A "debt collector" as defined under the FDCPA is a person or party seeking to collect a debt, or rent, on behalf of a third party. This would include any company that regularly collects debt for another person or entity, and certainly applies to fee management companies. The plain language of the rule indicates that the landlord who is owed the rent would not be a debt collector, while an attorney or management company, could be a debt collector and subject to this additional notice requirement. In the updated FAQs, the CDC is encouraging landlords, even if not legally required to do so, to inform tenants of the Order. The Update also expands penalty guidance, emphasizing reporting violations to the local U.S. attorney s office or the National Center for Disaster Fraud for prosecution. Other change in the Update include: Replacing prior language with new, more direct language stating that a landlord violates the Order by executing a writ of eviction or possession that led to the actual physical removal of a covered person during the term of the Order;Clarifying that a person is likely to qualify as a "covered person" under the Order if they receive federal low-income benefits, such as TANF, SNAP, SSI, or SSDI;Clarified that "covered persons" must provide a completed and signed copy of the required qualification declaration and may include not just the landlord but property managers, attorneys, or agents of the landlord/owner or any other person with a legal right to carry out an eviction;Expanded on past language that the Order applies, broadly, to any landlord, owner of a residential property, other person with a legal right to pursue an eviction or a possessory action against a residential tenant, lessee, or resident, including an agent or attorney acting on behalf of the landlord or the owner of the residential property; andExpanded on prior language that it does not supersede state and local laws that provide the same or greater protection, as determined by the applicable court, but does supersede all state or local orders to the extent state or local laws conflict with the Order. It is likely that the CDC will take an ever more aggressive position relative to enforcement of the Order, and an extension beyond June 30 is highly likely. Based on this new guidance, it is recommended that landlords, owners, agents, and management companies discuss with their attorneys whether any revised tenant notice requirements should be put into effect.

A. J. Johnson to Host Asset Webinar

A. J. Johnson will be conducting a webinar on April 29, 2021 on Dealing with Resident Assets at Affordable Housing Properties. The Webinar will be held from 1:00 PM to 3:00 PM Eastern time. This two-hour course provides a detailed discussion of requirements related to the determination of asset value and income and applies to all federal housing programs, including the low-income housing tax credit, tax-exempt bonds, Section 8, Section 515, HOME, and Public Housing. Multiple types of assets are covered, both in terms of what constitutes an asset and how they must be verified. The course concludes with a series of problems, designed to test the ability of the attendee to determine the value of an asset and calculate the income from that asset. Those interested in participating in the Webinar may register on the A. J. Johnson Consulting Services website (www.ajjcs.net) under "Training Schedule."

Affordable Housing Credit Improvement Act of 2021 Introduced in Congress

Once again, a bill has been introduced in Congress to amend the Low-Income Housing Tax Credit Program. The "Affordable Housing Credit Improvement Act of 2021" (AHCIA) was introduced in the Senate on April 15, 2021, by Senators Maria Cantwell (D-WA), Todd Young (R-IN), Ron Wyden (D-OR), and Rob Portman (R-OH), and in the House by Representatives Suzan BelBene (D-WA), Jackie Wolorski (R-IN), Don Beyer (D-VA), and Brad Wenstrup (R-OH). If enacted, the LIHTC program will be strengthened and better able to serve the Nation s affordable housing needs. The AHCIA has been introduced in each of the past three congresses, and each time has earned broad bipartisan support. While the full bill has not yet passed Congress, in 2020 a major component of the bill - the establishment of a minimum 4 percent credit rate - was passed into law. Key provisions have been reintroduced for 2021, including (1) an increase in housing credit allocations by 50% over current levels; (2) additional assistance to rural, Native-American, high-poverty, and high-cost communities, as well as extremely low-income and formerly homeless tenants; and (3) simplification of rules to make preservation of existing affordable housing easier. Some new provisions have also been added, including (1) states may choose to lower the threshold of Private Activity Bond financing from 50% to 25% in order to obtain a full non-competitive allocation of credits; (2) accelerate the implementation of the allocation increase from the previous five years to two years; (3) improve the housing credit student rule provision to clarify that formerly homeless youth and victims of human trafficking are eligible for affordable housing even if they are full-time students; and (4) update the casualty loss provision from the prior AHCIA to permit a longer rebuilding period after natural disasters, if permitted by the state agency. While this legislation has been introduced in three consecutive Congresses, the changes in both Congressional and Executive leadership increase the potential for full enactment of the Bill. We will track the status of the proposed legislation and if there are any changes, we will post an update.

A. J. Johnson Partners with Mid-Atlantic AHMA for April Training Series

During the month of April 2021, A. J. Johnson will be partnering with the MidAtlantic Affordable Housing Management Association for two live webinars intended for real estate professionals, particularly those in the affordable multifamily housing field. The following live webinars will be presented: April 21: 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. April 22: Violence Against Women Act - Guidance for Properties Subject to the Law The Violence Against Women (VAWA) Reauthorization Act of 2013 expanded VAWA protections to many different affordable housing programs - including the Low-Income Housing Tax Credit (LIHTC) Program. While HUD has provided detailed requirements on VAWA implementation at HUD properties, there has been no uniform guidance for LIHTC owners and managers. A proposal before Congress would legislate that LIHTC Extended Use Agreements contain VAWA requirements. The IRS has not provided guidance and while many state agencies are requiring VAWA plans, they are not providing information on what the plans should look like. This 2.5-hour training - when combined with the course materials- will review VAWA requirements and recommend best practices for developing VAWA plans at LIHTC and other non-HUD properties. The session will be presented by A. J. Johnson, a recognized expert in the affordable housing field and the author of "A Property Manager s Guide to the Violence Against Women Act." 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.