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HCCP Online Exam Now Being Offered By A. J. Johnson Consulting Services - Correction

Following is a correction to an earlier posted article on the HCCP online exam. Starting on March 8, 2021, A. J. Johnson Consulting Services will be offering the online version of the Housing Credit Certified Professional (HCCP) exam. Unlike the in-person exam, the online exam will be offered on an ongoing basis and need not be taken immediately after a scheduled training. The online exam fee will be $204.00, which is $29.00 higher than the fee for the in-person exam. This additional cost is necessary due to the cost of live proctoring that will take place during the exam. Access to the exam will be through the National Association of Homebuilders (NAHB) website. Detailed instructions regarding the registration process will be provided to registrants. There are a few things to know for persons interested in taking the online version of the exam: After the exam is purchased from NAHB, it will be administered by Examity - an online testing service.Test-takers should register with Examity and schedule the exam about a week ahead of the desired testing date.There are specific technical requirements that you must meet in order to take the online exam, including (1) access to a desktop computer or laptop [tablets and Chromebooks may not be used]; (2) an Internet speed of at least 2Mbps upload and download; and (3) a working internal or external webcam and microphone.Online exams provide a different experience for test-takers. Conditions relating to the online HCCP exam include -You must be alone in the room;You must have a clear desk and area;You must be connected to a power source;You cannot have a phone with you or be wearing headphones;You cannot have dual monitors;You cannot leave your seat or room during the exam;There is no talking;Your webcam, speakers, and microphone must remain on throughout the test;You may have a handheld calculator, but it may not be a programmable calculator;You cannot wear a smartwatch during the exam (yes - the proctor will ask to look at your wrists);You may have a pen or pencil;You may have scrap paper with you which you will show to the proctor at the beginning and end of the exam session. It must be blank at the start of the exam. After the exam, you will need to show the proctor your scrap paper and then tear it up in front of your webcam; andOnce finished with the exam, you will close out the window. The proctor will be online with you the entire time you are taking the exam and you are being recorded. At this time, the online version of the exam is generally the only option for taking the exam. Once in-person training resumes, the paper version of the exam will be available again. The in-person, paper exams are $175 per person. Results for persons taking the in-person exams will be provided approximately six weeks after the exam is taken. Unofficial results of the online exam are available immediately after taking the exam. This is followed up with an official email from NAHB confirming the exam result. A. J. Johnson will provide additional information regarding accessing the online exam during regular LIHTC training sessions. A list of upcoming training may be viewed on our website at www.ajjcs.net under "Training."

HCCP Online Exam Now Being Offered By A. J. Johnson Consulting Services

Starting on March 8, 2021, A. J. Johnson Consulting Services will be offering the online version of the Housing Credit Certified Professional (HCCP) exam. Unlike the in-person exam, the online exam will be offered on an ongoing basis and need not be taken immediately after a scheduled training. The online exam fee will be $200.00, which is $25.00 higher than the fee for the in-person exam. This additional cost is necessary due to the cost of live proctoring that will take place during the exam. Access to the exam will be through the National Association of Homebuilders (NAHB) website. Detailed instructions regarding the registration process will be provided to registrants. There are a few things to know for persons interested in taking the online version of the exam: After the exam is purchased from NAHB, it will be administered by Examity - an online testing service.Test-takers should register with Examity and schedule the exam about a week ahead of the desired testing date.There are specific technical requirements that you must meet in order to take the online exam, including (1) access to a desktop computer or laptop [tablets and Chromebooks may not be used]; (2) an Internet speed of at least 2Mbps upload and download; and (3) a working internal or external webcam and microphone.Online exams provide a different experience for test-takers. Conditions relating to the online HCCP exam include -You must be alone in the room;You must have a clear desk and area;You must be connected to a power source;You cannot have a phone with you or be wearing headphones;You cannot have dual monitors;You cannot leave your seat or room during the exam;There is no talking;Your webcam, speakers, and microphone must remain on throughout the test;You may have a handheld calculator, but it may not be a programmable calculator;You cannot wear a smartwatch during the exam (yes - the proctor will ask to look at your wrists);You may have a pen or pencil;You may have scrap paper with you which you will show to the proctor at the beginning and end of the exam session. It must be blank at the start of the exam. After the exam, you will need to show the proctor your scrap paper and then tear it up in front of your webcam; andOnce finished with the exam, you will close out the window. The proctor will be online with you the entire time you are taking the exam and you are being recorded. At this time, the online version of the exam is generally the only option for taking the exam. Once in-person training resumes, the paper version of the exam will be available again. The in-person, paper exams are $175 per person. Results for persons taking the in-person exams will be provided approximately six weeks after the exam is taken. Unofficial results of the online exam are available immediately after taking the exam. This is followed up with an official email from NAHB confirming the exam result. A. J. Johnson will provide additional information regarding accessing the online exam during regular LIHTC training sessions. A list of upcoming training may be viewed on our website at www.ajjcs.net under "Training."

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

During the month of March 2021, A. J. Johnson will be partnering with the MidAtlantic Affordable Housing Management Association in a series of live webinars for real estate professionals, particularly those in the affordable multifamily housing field. The following live webinars will be presented: March 10: The Verification and Calculation of Income and Assets on Affordable Housing Properties - This five-hour course (there will be a one-hour lunch break) provides concentrated instruction on the required methodology for calculating and verifying income, and for determining the value of assets and income generated by those assets. The first section of the course involves a comprehensive discussion of employment income, along with military pay, pensions/social security, self-employment income and child support. It concludes with workshop problems designed to test what the student has learned during the discussion phase of the training and serve to reinforce HUD required techniques for the determination of income. The second component of the training focuses on a detailed discussion of requirements related to the determination of asset value and income, and is applicable to all federal housing programs, including the low-income housing tax credit, tax-exempt bonds, Section 8, Section 515, HOME, and HOPE VI. Multiple types of assets are covered, both in terms of what constitutes an asset and how must they be verified. This section also concludes with a series of problems, designed to test the student s understanding of the basic requirements relative to assets. March 11: Compliance with Federal and State Fair Housing Requirements - the course "Compliance with Federal and State Fair Housing Requirements" will equip attendees with the knowledge and understanding needed to avoid fair housing violations.The course curriculum is centered around the regulations in the two major fair housing laws, The Fair Housing Act (Title VIII of the Civil Rights Act of 1968) and Section 504 of the Rehabilitation Act of 1973. The course also includes a discussion of the additional state and local protected characteristic. In addition, relevant portions of the American with Disabilities Act (ADA) are covered.The purpose of the Fair Housing Act is to eliminate housing discrimination, promote economic opportunity, and achieve diverse, inclusive communities. Professional fair housing training assists in this mission by ensuring that housing professionals understand both the rights of the public relative to fair housing and the duties and responsibilities of real estate professionals. March 16: Intermediate Level Tax Credit 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 battery-operated calculator is required for this course (cell phone calculators are acceptable). March 17: Preparing Affordable Housing Properties for Agency Required Physical Inspections - Agency inspections of affordable housing properties are required for all affordable housing programs, and failure to meet the required inspection standards can result in significant financial and administrative penalties for property owners. This four-hour training focuses on how owners and managers may prepare for such inspections, with a concentration on HUD REAC inspections and State Housing Finance Agency inspections for the LIHTC program. Specific training areas include (1) a complete discussion of the most serious violations, including health & safety; (2) how vacant units are addressed during inspections; (3) when violations will be reported to the IRS; (4) the 20 most common deficiencies; (5) how to prepare a property for an inspection; (6) strategies for successful inspections; and (7) a review of the most important Uniform Physical Conditions Standards as they relate to the five inspectable areas [site/doors & windows/electrical/building exterior & systems/Units & Common Area]. In addition, an update on the current status of REAC will be presented as will a discussion of the new "NSPIRE" protocol, that will ultimately replace the current REAC procedures. At the end of the training, attendees will have a blueprint they can use to prepare their properties for agency required physical inspections - regardless of the program under which they operate. March 18: Diversity, Discrimination, and Systemic Racism in Affordable Housing - Decent housing is a basic human right. Without decent, safe, and affordable housing, all aspects of family life suffer, and a life of dignity is impossible. Yet, an affordable housing crisis is a current reality in the United States and, for minorities, it has been a reality throughout the nation s history.This interactive, participant-oriented three-hour discussion is intended to invite discussion of systemic racism in affordable housing, why it exists, and how we can begin to overcome it. The discussion will be led by A. J. Johnson, who will attempt to set the framework for a non-political discussion of the discrimination that currently exists in the affordable housing field. It is hoped that a full airing of the issue can be achieved and participants will gain a more sensitive perception of the problem with a recognition that understanding leads to solutions - or at least efforts at solutions. Specific discussion areas will include (1) How a diverse hiring program can lead to diversity in housing; (2) the hard conversation of whether systemic racism actually exists; (3) the meaning of systemic racism; (4) examples of systemic racism in housing; (5) the consequences of systemic racism; and (6) steps that can be taken to begin ending systemic racism.This is not training - it is a discussion. It is intended for anyone who works in the affordable housing industry with an interest in providing housing for those most in need - regardless of their race, color, or national origin. Site Managers, Leasing Staff, Maintenance Staff, and owners will all benefit from this frank discussion of one of the most serious problems confronting our industry - and our nation - today. 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.

CDC Extends Residential Eviction Order

On January 29, 2021, the Centers for Disease Control and Prevention (CDC) issued an order extending the eviction moratorium to March 31, 2021. The order continues to ban evictions for certain renters under Section 361 of the Public Health Service Act. As described in the order, tenants qualifying as a "covered person" cannot be evicted for nonpayment of rent when a declaration under the penalty of perjury is provided to their landlord. Residents who previously submitted a declaration should not be asked to resubmit and should have continued protections until March 31, 2021. Much of the content of the September 4, 2020, original order has been incorporated into the updated order. In addition to extending the effective period date, the updated order also includes newly available modeling projections and observational data from COVID-19 incidence comparisons across states that have implemented and lifted eviction moratoria, which demonstrates the ongoing health rationale for the extension. The order now applies to American Samoa because cases of COVID-19 have now been reported there. The order does not relieve the tenants of the obligation to pay rent, and tenants must continue to comply with terms under the lease unrelated to rent. Nothing in the updated order precludes that landlords from charging or collecting fees, penalties, or interest as a result of the tenant's inability to pay rent on a timely basis. Evictions unrelated to nonpayment of rent can still take place. Any State, local, Tribal, or territorial area with a moratorium on residential evictions that provides the same or greater level of public health protection supersedes the updated CDC order. To the extent the Order conflicts with prior orders, the updated Order is controlling. Renter s or Homeowner s Declaration The Order includes an attachment ("Declaration Form") that tenants, lessees, or residents of residential properties who are covered by the CDC s Order may use to claim the protection. To invoke the CDC s order these persons must provide an executed copy of the Declaration form (or a similar declaration under penalty of perjury) to their landlord. Each adult listed on the lease must complete a declaration. Criminal Penalties Under 18 U.S.C. 3559, 3571; 42 U.S.C. 271; and 42 CFR 70.18, a person violating this order may be subject to a fine of no more than $100,000 if the violation does not result in death or one year in jail, or both, or a fine of no more than $250,000 if the violation results in a death or one year in jail, or both, or as otherwise provided by law. An organization violating this order may be subject to a fine of no more than $200,000 per event if the violation does not result in death or $500,000 per event if the violation results in death. Summary This Order applies to all landlords - not just those with some type of federal assistance at their property. While the order does not waive or forgive in any way rent that may be owed, or the collection of any fees relating to that rent, it also provides no relief to landlords relative to cash flow shortfalls as the result of the failure of residents to pay rent. For this reason, landlords should familiarize themselves with any local, State, or Federal assistance that may help in offsetting the loss of income due to non-payment of rent. Also, landlords are not required to inform residents of this Order, nor are they required to inform residents of the steps that must be taken in order to request the relief afforded by this Order. Finally, residents are not entitled to the relief granted by this Order unless they provide the Declaration of need, as outlined in the Order.

President Biden Issues Wide-Ranging Executive Order Relating to Fair Housing

If there was any doubt about how the new Administration s approach to fair housing will differ from that of the prior administration, the Executive Order signed by President Biden on January 26, 2021, should resolve the issue. The Order, titled "Memorandum on Redressing our Nation s and the Federal Government s History of Discriminatory Housing Practices and Policies,"  outlines the 20th Century history of housing discrimination by Federal, State, and local governments.  According to the Order, these policies contributed to segregated neighborhoods and inhibited equal opportunity and the chance to build wealth for minorities. Among the results of these practices is a racial gap in homeownership; a persistent undervaluation of properties owned by families of color; a disproportionate burden of pollution and exposure to the impacts of climate change in communities of color; and systemic barriers to safe, accessible, and affordable housing for people of color, immigrants, individuals with disabilities, and the LGBTQ community. Since Congress enacted the Fair Housing Act (FHA) in 1968, access to housing and the creation of wealth through homeownership has remained persistently unequal, and many neighborhoods are as racially segregated today as they were in the middle of the 20th century. In fact, the racial wealth gap today is wider than it was in 1968. As stated in the Order, the FHA imposes on Federal departments and agencies the duty to "administer their programs and activities relating to housing and urban development in a manner affirmatively to further" fair housing. This created a mandate to take actions to undo historic patterns of segregation. Accordingly, the Order states, "it is the policy of my Administration that the Federal government shall work with communities to end housing discrimination, to provide redress to those who have experienced housing discrimination, to eliminate racial bias and other forms of discrimination in all stages of home buying and renting, to lift barriers that restrict housing and neighborhood choice, to promote diverse and inclusive communities, to ensure sufficient physically accessible housing, and to secure equal access to housing opportunity for all." The primary component of the Order directs that the Department of Housing & Urban Development (HUD) shall examine the impact of two rules promulgated by the Trump administration: (1) "Preserving Community and Neighborhood Choice," which repealed the July 16, 2015 rule entitled "Affirmatively Furthering Fair Housing. This 2020 rule significantly weakened the requirement that localities identify obstacles to fair housing or face a loss of federal funding for failure to do so; and (2) "HUD s Implementation of the Fair Housing Act s Disparate Impact Standard," which became a rule on September 24, 2020. This made it much harder for plaintiffs to make a case under the disparate impact theory of fair housing. It is almost certain that HUD will reverse the two rules issued by the Trump administration and put in place an aggressive requirement for affirmatively furthering fair housing as well as return the test for proving a disparate impact case to pre-2020 standards (the three-part "burden-shifting test.") Based on the tenor of this Order, it is likely that the next four years will see much more aggressive enforcement of fair housing law that has been seen recently.

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

During the month of February 2021, A. J. Johnson will be partnering with the MidAtlantic Affordable Housing Management Association in a series of live webinars for real estate professionals, particularly those in the affordable multifamily housing field. On February 11, A.J. will present "Principles of Successful Site Management." This full-day course provides an A-Z introduction to residential site management. The course is designed for site managers and supervisory property managers and covers management styles, recruiting and hiring of staff, affordable housing ownership entities and regulatory bodies, security and emergency procedures, basic landlord/tenant issues, unique leases and addendums for affordable housing programs, professional ethics, on-site maintenance requirements, property financial management, marketing, and leasing. The purpose of the course is to provide a broad overview of sound property management practices and principles, to complement the technical program expertise required of affordable housing managers. This will be followed on February 18 with "Basic Low-Income Housing Tax Credit 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 the LIHTC 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. The series will conclude on February 24 with "Sexual Harassment in Affordable Housing." No one should ever have to choose between housing and sexual harassment. The U.S. Department of Justice (DOJ) is undertaking an initiative to combat sexual harassment in housing, in an effort to protect individuals from harassment by landlords, property managers, maintenance workers, security guards, and other employees and representatives of rental property owners.This three-hour session is designed to assist attendees in their understanding of fair housing laws relating to sexual harassment, as well as review examples of sexual harassment - including case studies of recent court decisions. The training will offer substantive and specific examples of policies that owners may establish to prevent sexual harassment and, when harassment occurs, a detailed description of the investigative process will be provided. The provision of a sample Fair Housing Code of Conduct for Maintenance and Leasing Staff will enable attendees to immediately begin implementing policies at the property level to prevent and deal with sexual harassment in affordable housing.The session is intended for anyone involved in the affordable housing industry, including site staff (leasing and maintenance), property managers, and owners. 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.

Democratic Control of Executive and Legislative Branches Increase Chances for Affordable Housing Initiatives

Since Senators-elect Reverend Raphael Warnock and Jon Ossoff won the January 5 Georgia run-off elections, the Senate will be evenly divided between 50 Republicans and 50 Democrats. Vice-President-elect Kamala Harris will decide the outcome of any tied votes through her role as President of the Senate, giving Democrats the majority. With Democrats winning control of the Senate, 2021 offers a good chance for advances in affordable housing legislation. The majority status of the Democrats means they will have the leadership of the full Senate and all committees, the ability to set the Senate floor agenda and more easily confirm Biden administration nominees, and the ability to take advantage of the budget reconciliation process. This allows the controlling party to bypass filibuster rules (which require 60 votes to pass legislation) and pass certain types of legislation with a simple majority. The control of the Senate also means the Biden administration will have an easier path to enacting components of its comprehensive housing plan that calls for a $640 billion investment over ten years, including strengthening and expanding the Low-Income Housing Tax Credit (LIHTC) program, provision of Housing Choice Vouchers to all eligible families, creating a new renter s tax credit, and providing a new $100 billion affordable housing fund. With regard to the LIHTC program, the Biden Affordable Housing Plan calls for expanding the LIHTC with a $10 billion investment. This will be designed to make the credit more efficient, dramatically increasing the number of new or rehabilitated affordable housing units. The Plan will also ensure that urban, suburban, and rural areas all benefit from the LIHTC. Following are some of the major elements of the Biden Housing Plan that now stand a much greater chance of moving forward: End redlining and other discriminatory housing practices. The Biden Plan includes a Homeowner & Renter Bill of Rights that will expand protections for renters, including a law prohibiting landlords from refusing to accept vouchers. The mechanism for this would be a revision to the Fair Housing Act, adding "Source of Income" as a new protection.Tenant eviction protection will be pushed with the passage of The Legal Assistance to Prevent Evictions Act of 2020. This will assist tenants facing eviction in obtaining legal assistance. The elimination of local and state housing regulations that perpetuate discrimination - specifically exclusionary zoning. Biden s proposed legislation would require any state or locality receiving Community Development Block Grant (CDBG) funds or (more significantly) Surface Transportation Block Grants to develop a strategy for inclusionary zoning and will fund states to assist them in eliminating exclusionary zoning policies. This is a particularly important proposal, especially the withholding of transportation funds. While not all localities use CDBG money, virtually every city and state want to share in the federal transportation funds. The inability to build new roads or improve highways would be a major issue for localities and the potential withholding of such funds would be a serious "stick" in the push for inclusionary zoning. This could open up substantial new urban areas for the development of affordable rental housing.Strengthen the Community Reinvestment Act (CRA) to ensure that non-bank financial service institutions (e.g., mortgage and insurance companies) serve all communities.Provide downpayment assistance through a refundable and advanceable tax credit of $15,000 and fully fund the Housing Choice Voucher and Project-Based Rental Assistance (PBRA) programs. Under this proposal, Housing Choice Vouchers would be made available to every eligible household. Currently, 75% of eligible families do not receive assistance. This, along with fully funding the PBRA programs, would provide assistance to 17 million households.Creation of a new renter s tax credit, designed to reduce rent and utilities to 30% of income for families who make too much money to qualify for rental assistance.Expand housing benefits for first responders, public school teachers, and other public and national service workers who commit to living in persistently impoverished communities. This program would provide additional down-payment assistance and low-interest rehab loans.Establish a $100 billion Affordable Housing Fund to construct and upgrade affordable housing - primarily in areas with a short supply of affordable housing.Increase funding for the HOME program by $5 billion.Increase funding for the Housing Trust Fund (HTF) Program by $20 billion.Expand the Low-Income Housing Tax Credit Program (LIHTC) by $10 billion.Increase funding for repairs to the Rural Development Section 515 Program. Most of these proposal will require Congressional action, so the issue of who controls Congress is no small thing. Now that the Democrats control the Senate, the chance for passage of Biden s plan increases. Impact on Agencies As with any change in administrations, the top leadership of both HUD and Agriculture will change. An additional factor is that during the past four years, many agency professionals have retired or resigned; these positions are harder to replace than the political appointees. Having said that, the appointment of qualified leadership can go a long way in attracting qualified professionals and retaining those that are there. President-Elect Biden has named his choices to head HUD and Agriculture. Secretary of Housing & Urban Development (HUD) President-elect Biden has nominated Rep. Marcia Fudge (D-OH) to lead HUD. HUD will play a key role in the incoming administration s response to the COVID-19 pandemic, which has caused millions of people to fall behind on rent and mortgage payments. If confirmed, which is highly likely, Rep. Fudge will take over amid an acute housing crisis, as millions of tenants walloped by the pandemic-driven economic crisis face eviction and massive back-rent bills. The Biden administration is expected to push for Congress to pass a relief package dedicating billions of dollars to rent relief, and HUD will likely seek additional funding to address homelessness. Fair housing will also be a priority. The Biden transition lists "racial equity" as a Day One priority, alongside COVID-19, the economic crisis and climate change. The gap in homeownership rates between white and Black Americans has never been wider, a key driver of the persistent racial wealth gap. Among the new secretary s first tasks will be restoration of the 2015 Affirmatively Furthering Fair Housing (AFFH) rule, which outgoing HUD Secretary Ben Carson revoked this past summer. The original rule - which the Obama administration introduced as a way to beef up enforcement of the Fair Housing Act - would have required local governments to track patterns of segregation with a checklist of 92 questions in order to gain access to federal housing funds. The AFFH was not the only fair housing rule that the Trump administration has tried to gut. Carson s HUD also introduced a regulation revamping the Agency s 2013 "disparate impact" rule to make it harder to prove unintentional discrimination. A federal judge in October issued a preliminary injunction to stop HUD from implementing the new rule, which would have required plaintiffs to meet a higher threshold to prove unintentional discrimination, known as disparate impact, and given defendants more leeway to rebut the claims. It is likely that HUD, under Fudge, will return to a more neutral disparate impact test. The naming of Fudge has resulted in an immediate improvement in the morale at HUD, which has deteriorated under the leadership of Ben Carson. Under Fudge, other initiatives of the Trump/Carson era will certainly be rolled back, including (1) the anti-Transgender rule changes to the Equal Access Rule, and (2) elimination of the proposal to force mixed-status immigrant families to separate or face eviction from HUD-assisted housing. As for the Department of Agriculture, which oversees the rural housing programs, Biden has selected Tom Vilsack, who was the Agriculture Secretary under President Obama. Vilsack served as governor of Iowa from 1999 to 2007 and served as Agriculture Secretary for both of Obama s terms. Since then, he has been a lobbying executive for the dairy industry. While not a popular choice among environmentalists, Vilsack was supportive of the RD housing programs, although he was not an aggressive advocate. His presence is unlikely to slow down the current push to roll RD housing programs into HUD. In the not-to-distant future, the efforts to revise America s approach to affordable housing will begin. It is certain that greater priority will be given to affordable housing over the next four years than during the most recent four years.

IRS Extends COVID-19 Relief

In response to the COVID-19 pandemic, the IRS issued Notice 2020-53 in July 2020.  This Notice provided temporary relief from certain requirements under 42 of the Internal Revenue Code and 142(d) and 147(d) of the Code for properties with tax-exempt bonds. In response to the continuing presence of the pandemic, the IRS has issued Notice 2021-12, extending that relief and also providing temporary relief from additional 42 requirements not previously addressed in 2020-53. Background On March 13, 2020, the President issued an emergency declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act in response to the ongoing COVID-19 pandemic. This emergency declaration instructed the Treasury Department "to provide relief from tax deadlines to Americans who have been adversely affected by the COVID-19 emergency, as appropriate " The emergency declaration applies to all 50 states, Washington DC, and the five territories. Revenue Procedure 2014-49 provides temporary relief from certain requirements of 42 for Agencies and Owners of LIHTC projects. Revenue Procedure 2014-50 does the same thing for properties financed with tax-exempt bonds. Prior Relief Actions On April 9, 2020, the IRS issued Notice 2020-23, which provided certain relief to low-income housing projects and postponed due dates until July 15, 2020, with respect to certain tax filings and payments, certain time-sensitive government actions, and all time-sensitive actions listed in Revenue Procedure 2018-58 that were due to be performed by April 1, 2020, but before July 15, 2020. These time-sensitive actions include, among others: The time to show that 10% of project basis has been established;The 24-month rehab period; andAnnual Owner Certifications to the HFA. Scope of Relief Granted in This Notice The 10% Test for Carryover Allocations: If the last day for an Owner of a building with a carryover allocation to meet the 10% test is on or after April 1, 2020, and before September 30, 2021, the last day for the owner to meet the 10% test is postponed to the earlier of one year from the original due date or September 30, 2021.The 24-Month Rehabilitation Expenditure Period: If the 24-month minimum rehabilitation expenditure period for a building originally ends on or after April 1, 2020, and before September 30, 2021, the last day for the owner to incur the minimum rehabilitation expenditures test is postponed to the earlier of one year from the original end date or September 30, 2021.Placed in Service Deadline: if the deadline for a low-income building to be placed in service is the close of calendar year 2020, the last day for the owner of the building to place the building in service is postponed to December 31, 2021.Reasonable Period for Restoration or Replacement in the Event of Casualty Loss: If a low-income building has suffered a casualty loss and the reasonable period to restore by reconstruction or replacement ends on or after April 1, 2020, and before December 31, 2020, the last day for the Owner of the building to restore the loss by reconstruction or replacement is December 31, 2020.Reasonable Restoration Period in the Event of Prior Major Disaster: if a low-income building, not due to a pre-COVID-19-pandemic Major Disaster, has suffered a casualty loss that would have reduced its qualified basis and if the reasonable restoration period determined by the Agency for the building ends on or after April 1, 2020, then the last day of the reasonable restoration period is postponed by a period of one year from the original end date but not beyond December 31, 2021. The allocating agency may require a shorter extension or no extension at all.Extension to Satisfy Occupancy Obligations: If the close of the first year of the credit period is on or after April 1, 2020, and on or before June 30, 2021, then the qualified basis for the building for the first year of the credit period is calculated by taking into account any increase in the number of low-income units by the close of the six-month period following the close of that first year.E.g.: assume the deadline for meeting a project s minimum set-aside and qualifying all low-income units to avoid the "2/3" unit rule was December 31, 2020. The revised deadline is June 30, 2021.Correction Period: If a correction period for non-compliance that was set by the HFA ends on or after April 1, 2020, and before September 30, 2021, then the correction period is extended by a year, but not beyond December 31, 2021.E.g.: The HFA discovered noncompliance on March 1, 2020, and gave the owner until June 1, 2020, to correct the noncompliance. The non-compliance was not corrected and the HFA reported it to the IRS as non-corrected noncompliance. The owner now has until June 1, 2021, to correct the noncompliance. The HFA may submit an amended 8823 to the IRS, citing this Notice and providing for the extended correction period. Keep in mind that the HFA may require a shorter extension or no extension at all.The 12-Month Transition Period to Meet Set-Aside for Qualified Residential Rental Projects: the last day of a 12-month transition period for tax-exempt bond projects that ends on or after April 1, 2020, and before September 30, 2021, is postponed to September 30, 2021.The 147(d) Two-Year Rehabilitation Expenditure Period for Bonds Used to Provide Qualified Residential Rental Projects: If a bond is used to provide a qualified residential rental project and if the two-year rehabilitation period for the bonds ends on or after April 1, 2020, and before September 30, 2021, the last day of that period is postponed to the earlier of one year from the original due date or September 30, 2021.Grant of Relief Pursuant to 1.42.13(a):Income Recertifications: An owner of a low-income building is not required to perform income recertifications in the period beginning on April 1, 2020 and ending on September 30, 2021. The owner must resume the income recertifications as due after September 30, 2021.E.g., a recertification that is due on September 1, 2021 does not have to be performed. The next recertification will be due on September 1, 2022, keeping in mind that HFAs may have their own requirement in this area.Compliance Monitoring: An agency is not required to conduct compliance monitoring inspections or reviews in the period beginning on April 1, 2020 and ending on September 30, 2021. The Agency must resume compliance monitoring inspections or reviews as due under 1.42-5 after September 30, 2021.Common Areas & Amenities: If an amenity or common area in a low-income building or project is temporarily unavailable or closed during some or all of the period from April 1, 2020 to September 30, 2021, in response to the COVID-19 pandemic, and not due to other 42 noncompliance, this temporary closure will not result in a reduction of the eligible basis of the building.Guidance Permitting Agencies to Conduct Telephonic Hearings: QAP hearings due on or after April 1, 2020, and before September 30, 2021, may be held by teleconference. The teleconference must be accessible to the residents of the locality where the Agency has jurisdiction by calling a toll-free telephone number.Emergency Housing for Medical Personnel & Other Essential Workers: If individuals who are medical personnel or other essential workers (as defined by State or local governments) provide services during the COVID-19 pandemic, then, for purposes of providing emergency housing from April 1, 2020 to September 30, 2021, for both LIHTC and tax-exempt bond projects, HFAs, Owners, and Operators of low-income housing projects may treat these individuals as if they were Displaced Individuals under Revenue Procedures 2014-49 or 2014-50. Owners and operators of LIHTC and tax-exempt bond projects should consult with their HFAs or Issuing Agencies in order to determine if any requirements in addition to those outlined in this Notice will be implemented.