News

CDC Extends Eviction Moratorium

On March 29, 2021, the Centers for Disease Control and Prevention (CDC) extended the federal eviction moratorium. The moratorium that was scheduled to expire on March 31, 2021, is now extended through June 30, 2021. 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 June 30, 2021. This is the third time the deadline for lifting the ban has been pushed back. The CDC s order first went into effect in September and initially was set to expire at the end of 2020. In December, the protection was extended until January 31 and then again until March 31. 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 tenants' 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. Federal Departments and Agencies will Aggressively Enforce the Order HUD will reach out to HUD grantees and program participants to communicate about the eviction moratorium extension and will offer guidance and support.The USDA will send notices to all Section 515 and 538 property owners to inform them of their obligations under the moratorium. USDA will require property owners to post the extension at their properties along with a template of the tenant declaration. Landlord Groups Remain Opposed to the Order Landlord groups continue to challenge the order as government overreach and say the CDC eviction moratorium puts an outsized burden on property owners, some of whom have not seen rent from tenants for a year. There are also several legal challenges to the moratorium. Some courts said the CDC has the authority to issue the order and rejected efforts to stop the ban, while others have ruled in favor of landlords. A federal judge in Ohio ruled that the CDC has overstepped its authority in issuing a nationwide eviction ban. The Department of Justice is appealing a ruling from a federal judge in Texas stating that the federal moratorium on evictions is unconstitutional. The CDC order imposes criminal penalties on landlords who violate the order, but enforcement has been almost non-existent, and there is no process for renters to file complaints against landlords who violate the order. 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 a 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 a death or $500,000 per event if the violation results in a death.

HUD Publishes 2021 Income Limits

On April 1, 2021, HUD published the 2021 income limits for HUD programs as well as for the Low-Income Housing Tax Credit and Tax-Exempt Bond programs. The limits are effective on April 1, 2021.  The limits for the LIHTC and Bond projects are published separately from the limits for HUD programs. HUD has indicated that the U.S. median income limit is higher this year than it was in 2020. The median has increased by almost 2% and is now $79,900. LIHTC and Bond properties use the Multifamily Tax Subsidy Project (MTSP) limits and are held harmless from income limit (and therefore rent) reductions. These properties may use the highest income limits used for resident qualification and rent calculation purposes since the project has been in service. HUD program income limits are not held harmless. Unlike 2020, HUD is now publishing the 50% and 60% MTSP limits in the same table with the Average Income (AI) limits. AI limits are set at 20%, 30%, 40%, 50%, 60%, 70%, and 80%. Projects in service prior to 2009 may use the HERA Special Income Limits in areas where HUD has published such limits. Projects placed in service after 2008 may not use the HERA Special Limits. Projects in rural areas that are not financed by tax-exempt bonds may use the greater of the MTSP limits or the National Non-Metropolitan Income Limits (NNMIL). According to HUD, the non-metropolitan median income has gone up approximately 1.8% from 2020 to 2021. Owners of LIHTC projects may rely on the 2020 income limits for all purposes for 45 days after the effective date of the newly issued limits. This 45-day period ends on May 16, 2021. The limits for HUD programs may be found at www.huduser.gov/portal/datasets/il.html. The limits for LIHTC and Bond programs may be found at www.huduser.gov/portal/datasets/mtsp.html

IRS Issues Clarifying Guidance Relating to COVID-19 Occupancy Relief

In January 2021, the IRS published Notice 2021-12, extending and expanding on the COVID-19 relief provided by Notice 2020-53 that was issued in July 2020. Section IV.E of Notice 2021-12 provided an extension to satisfy certain occupancy obligations. It stated that for purposes of Section 42(f), "if the close of the first year of the credit period with respect to a building 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 6-month period following the close of that first year." Section 42(f) is "Definition and special rules relating to credit period." This section includes special rules for the first year of the credit period, including how the applicable fraction is determined for the first year. Since the applicable fraction is used in the determination of qualified basis, Notice 2021-12 seemed to indicate that the six-month extension applied to any determination of first year qualified basis. This would mean that units qualified after then end of the first year of the credit period, but within the six-month extension, would qualify for first year credits. On March 16, 2021, the IRS issued Notice 2021-17, which will be included in the April 5, 2021 Internal Revenue Bulletin. This notice provides a more precise reference citation, clarifying that Section IV.E of Notice 2021-12 applies only for purposes of 42(f)(3)(A)(ii). This section of the code stipulates that units qualified after the first year of the credit period will only be entitled to 2/3 of the credit that units qualified during the first year of the credit period may claim. This clarification indicates that increases in qualified occupancy during the six-month extension may be used to avoid two-thirds tax credits in the future but may not be used to actually claim first-year credit for units not qualified during the first year. In other words, units qualified after the first year of the credit period but within the six-month extension, will be able to claim accelerated credit beginning in the second year of the credit period. Units qualified during this extension will not be entitled to credits during the first year of the credit period.

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.