News

National Fair Housing Alliance Files Suit Against Multiple Assisted Living Operators

The National Fair Housing Alliance (NFHA) has filed suit against eight companies that operate 16 assisted living facilities in the Salt Lake City, Albuquerque, and Santa Fe metropolitan areas. The suits were filed in the U.S. District Court for the District of Utah and the U.S. District Court for the District of New Mexico and allege that the companies are discriminating against prospective elderly residents who have been deaf since birth and primarily communicate in American Sign Language (ASL). In a series of phone calls and on-site visits conducted by fair housing testers over an 18-month period, staff at each assisted living facility either refused to provide a potential elderly deaf resident with a qualified ASL interpreter or other aids and services to ensure they would be able to communicate effectively or said that interpretation services would be charged to the applicant or the applicant s family. Fair housing law provides distinct protections for people who are deaf or hard of hearing. One protection is the right to interpreters or other aids to ensure they can effectively communicate with housing providers. Housing providers may not refuse a reasonable accommodation request from a person who is deaf or hard of hearing to have important information communicated through ASL or other effective auxiliary aids. Housing providers are required to provide interpretation services to people who are deaf or hard of hearing free of charge unless doing so would place an undue financial and administrative burden on the provider. Examples of discriminatory conduct contained in the eight lawsuits include: The facility s flat refusal to provide an ASL interpreter;The facility s provision that it would allow an interpreter, but only if the applicant or the applicant s family would pay for those services;The facility s recommendation that the applicant s family use a senior living placement service to find a senior living facility that better served the needs of the potential resident;The facility s statement that it would not be a good fit for the prospective deaf applicant; andThe facility s statement that, while it had access to ASL resources, it could not guarantee the service would be available on a continual basis and that, if there were costs associated with the service, the resident may have to pay half the charges. The lawsuits have been filed against Brookdale Senior Living;Spectrum Retirement Communities;Pacifica Senior Living;LifeSpire Assisted Living;LeisureCare; andBeeHive Homes. These companies operate 16 facilities investigated by NFHA in New Mexico and Utah and provide over 1,100 beds. This case is a strong reminder of the responsibility of housing providers relative to reasonable accommodation requests. When such requests are necessary due to a disability, and do not result in an undue financial burden or fundamentally alter how a property will operate, the accommodation must be granted and the housing provider must pay the cost of the accommodation.

A. J. Johnson to Offer Fair Housing Webinar

A. J. Johnson will be conducting a webinar on July 23, 2020 on Compliance with Federal and State Fair Housing Requirements. The Webinar will be held from 1:00 PM to 4 PM Eastern Time. This training 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. Also, relevant portions of the American with Disabilities Act (ADA) are covered.In addition to covering each of the protected classes in detail, the session will feature the most up-to-date information on the new HUD guidance regarding assistance animals and criminal record screening. The course concludes with a review of advertising requirements and how the law is enforced at the federal level. Those interested in participating in the Webinar may register on the A. J. Johnson Consulting Services website (www.ajjcs.net) under "Training."

Webinar on VAWA Plans for LIHTC Properties

A. J. Johnson will be conducting a webinar on July 22, 2020 on The Violence Against Women Act (VAWA) - Guidance for LIHTC Owners & Management Agents. The Webinar will be held at 1:00 PM Eastern Time. 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 one-hour training - when combined with the course materials- will review VAWA requirements and recommend best practices for developing VAWA plans at LIHTC 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." Those interested in participating in the Webinar may register on the A. J. Johnson Consulting Services website (www.ajjcs.net) under "Training."

HUD Updates Guidance on CARES Act Eviction Moratorium

On July 1, 2020, HUD issued Notice H-20-07, Coronavirus Aid, Relief, and Economic Security (CARES) Act Eviction Moratorium. This Notice provides background and up-to-date guidance on HUD s policies and procedures regarding the eviction relief provided to tenants of certain multifamily properties under the CARES Act (signed into law on March 27, 2020). Specifically, the Notice extends the moratorium on evictions for all HUD-insured or HUD-held mortgages while under forbearance and also provides guidance on tenant protections for multifamily properties not subject to forbearance and those with HUD-assisted units. Unless rescinded or amended, this Notice will be HUD Multifamily Housing s procedures for the duration of the COVID-19 emergency. Background HUD is particularly concerned about the impact of the expiration of the tenant protections provided by the CARES Act, and encourages owners, agents, and contract administrators to work with those residents who have been impacted by the COVID-19 emergency to the extent practicable. During the period March 27, 2020 to July 24, 2020, the CARES Act prohibits owners of certain multifamily properties from certain acts; such owners may not: Make, or cause to be made, any filing to initiate a legal action to recover possession of a covered dwelling unit from a tenant for nonpayment of rent or other fees or charges; orCharge fees, penalties, or other charges to the tenant related to the nonpayment of rent. In addition, covered tenants may not be given a notice to vacate until after July 24, 2020 for nonpayment of rent and then must be given at least 30 days to vacate after the notice is given. While the CARES Act is silent on what an owner or agent can charge after the eviction moratorium ends, HUD interprets the law to mean that unpaid rents will accrue during the moratorium and may be collected from tenants after it concludes, along with any fees or charges that were assessed and left unpaid prior to March 27, 2020.  However, fees and charges for rent due during the moratorium may not be accrued. Some owners of certain HUD projects requested mortgage forbearance that took effect shortly after March 27, 2020. This 90-day forbearance period will be ending shortly, but these owners are still subject to the eviction moratorium until July 24, 2020. Owners who received mortgage forbearance for a 90-day period after the March 27 date, remain subject to the eviction moratorium and renter protections until both the moratorium and forbearance period have expired. If an owner negotiates an extension to the forbearance period, the eviction moratorium must be extended for the full term of any negotiated extension of forbearance. The Notice provides the following additional requirements for owners who receive extended forbearance protection: Tenants who missed rent payments during the forbearance period must be allowed to make up the missed payments over a reasonable time as determined in the sole discretion of the borrower. The owner may not require that missed rent payments be repaid in one lump sum at the end of the forbearance period.During the time an owner is repaying missed mortgage payments due to forbearance, the owner may not charge tenants late fees or penalties due to late or missed rent payments. Tenant Protections for Mortgaged Properties Not Subject to Forbearance Many HUD-insured properties and those with HUD-held mortgages, as well as Section 202 and Section 811 financing did not receive mortgage forbearance, and tenants in those properties are not protected under the CARES Act. HUD is "encouraging" all owners of properties with FHA insured, HUD-held mortgages, and Section 202/811 financing to work with tenants to avoid evictions. Such measures could include rent payment plans, delayed evictions, and/or other measures to avoid evictions. Owners of these properties may pursue available financial relief measures when necessary, including reserve for replacement and residual receipt account releases; suspension of reserve for replacement account deposits; owner advances; and/or loans or other resources from outside sources to lessen the impact of lost rental income during the pandemic. Owners of HUD properties should obtain a copy of HUD Notice H-20-07 and familiarize themselves with the requirements of the Notice.

HUD Issues Update Notice on COVID-19 Statutory and Regulatory Waivers

On July 2, 2020, the Department of Housing & Urban Development (HUD) issued Notice PIH 2020-05, Rev. 1 "COVID-19 Statutory and Regulatory Waivers and Alternative Requirements for the Public Housing, Housing Choice Voucher, Indian Housing Block Grant and Indian Community Development Block Grant programs, Suspension of Public Housing Assessment System and Section 8 Management Assessment Program." These waivers provide alternative requirements for Housing Quality Standards (HQS) inspections of Section 8 Voucher units, resident income recertifications, and other requirements. On April 10, 2020, HUD published Notice PIH 2020-05 using authority granted under the CARES Act to establish waivers and administrative flexibilities to provide relief to PHAs, Indian Tribes,  and Tribally Designated Housing Entities (TDHEs) in response to the COVID-19 pandemic. In this revised Notice, HUD reinstates the waivers and alternative requirements published in the initial notice, provides additional waivers and alternative requirements, extends the periods of availability for previously established waivers and alternative requirements, and issues technical  amendments to several of the previously established waivers and alternative requirements. Affected entities may choose in implement any or all of these waivers, immediately or at any point during the applicability period. Most provisions of the Notice have been extended through December 31, 2020. Provisions of the Notice follow: HQS Waivers PHAs can enter into a Housing Assistance Payment (HAP) contract for tenant-based or PBV units, turn over units to a new family, add new units to a PBV contract, or substitute units on a PBV contract without conducting a HQS inspection through December 31, 2020. In lieu of the HQS inspection, the PHA may accept a certification from the project owner that the owner "has not reasonable basis to have knowledge that life threatening conditions exist" in the units. Units must be inspected within one year of the owner certification. These same alternate requirements apply to PHAs choosing to utilize the alternative inspection flexibility that had previously been provided under the Housing Opportunity Through Modernization Act of 2016 (HOTMA), which allows the PHA to recognize alternative inspection regimes such as REAC. In lieu of a PHA inspection within 15 days, the PHA may accept an owner s certification of no knowledge of life threatening conditions, and then the unit would have to be inspected within one year of the certification. If an HQS inspection has been conducted but the PHA utilizes the Non-Life Threatening Deficiencies (NLT) flexibility that had previously been provided under HOTMA, project owners can have up to 60 days, instead of 30, to make NLT repairs; this authority runs through December 31, 2020. For units already under a HAP contract, PHAs may delay the required biennial HQS inspections until no later than one year from the date the biennial inspection would have been required absent the waiver. If a tenant notifies a PHA that their unit does not comply with HQS, through December 31, 2020, the PHA may notify the project owner in lieu of conducting an HQS inspection. For life threatening deficiencies, the owner must either correct the deficiency or provide evidence that the deficiency does not exist within 24 hours.  For non-life threatening deficiencies, the project owner must either correct the deficiency or provide evidence that the deficiency does not exist within 30 days of the PHA notification. HUD is waiving the HQS requirement that a leased unit have at least one bedroom or sleeping room for every two people in order to accommodate residents who may need to add household members as a result of the pandemic. Recertifications of Income and Family Composition for Public Housing & HCV/Section 8 PHAs can delay annual re-examinations of family income and composition until December 31, 2020.If a PHA wishes to proceed with recertifications, through December 31, 2020, PHAs may rely on family self-certification and forego reliance on third-party income verification, such as the EIV. HUD is even allowing this self-certification to occur over the phone if the PHA staff creates a contemporary written record.Interim certifications can be used to adjust a family s tenant portion of rent if they have lost income. Again, PHAs may rely on family self-certifications and need not rely on EIV or other third-party verification through December 31, 2020. Further, PHAs may wish to review and adjust their interim re-examination policies, such as when increases in family income must be reported or how to determine the effective date of the interim recertification.Mandatory EIV monitoring is waived through December 31, 2020. However, families will be responsible if significant discrepancies from their self-certification are later discovered.Additionally, if a PHA s payment standard increases, PHAs need not wait until the regular family re-examination for a unit to increase the HAP subsidy. Additional Waivers Applicable to PIH and HCV/Section 8 Programs Section 8 Administrative Plans and Public Housing Admissions and Continued Occupancy Policies (ACOPs) may be temporarily amended without board of director s approval until September 30, 2020; the PHA must formally adopt any such changes by December 31, 2020.PHA Annual Plan/5-Year Plan submission dates have been extended - PHAs with June 30 and September 30 fiscal year ends now have until October 18, 2020, to submit their annual or five-year plans. PHAs with December 31 fiscal year ends have until January 16, 2021. In addition, plan amendments, except for amendments required by RAD, Section 18, and Section 22 repositioning efforts, may be adopted without an open public meeting of the PHAs board of directors.HUD is still requiring PHAs to notify tenants of policy changes, but 30-day advanced notice is no longer required.PHAs have been given broad latitude to extend a family s initial voucher, execute HAP contracts up to 120 days after the start of a family s lease, allow vacancies for more than 180 days, and retain units on a HAP contract even if the unit does not generate subsidy for more than 180 days.COVID-19 qualifies as "good cause" through December 31, 2020, to extend a family s participation in the FSS program for up to two years.Raises the age of eligibility from 24 to 25 in the Family Unification Program (FUP); extends the length of assistance for a year for youths who were approaching the 36 month cut-off for assistance under FUP; and extends the length of time that a youth has to find a unit under FUP from 90 to 120 days.Extends the period of eligibility for Section 8 homeownership assistance by one year for families approaching their maximum term of assistance prior to December 31, 2020.Public notice for PHAs opening or closing waiting lists can be provided by leaving an outgoing voice message on its answering system and website, if the messages are accessible for hearing, visual, and other communication-related disabilities.Suspends the requirement, through December 31, 2020, the PHAs that own or operate public housing make an annual inspection of each public housing project to determine whether units in the project are maintained to applicable standards and remain safe for residents.Capital Fund obligation end dates and expenditures end dates are extended by one year. PHAs may exceed Total Development Cost (TDC) and Housing Construction Cost (HCC) limits by 25% and may seek HUD approval to exceed these costs by up to 50%.PHAs may use force account labor, rather than contracted labor, for modernization activities.Energy audits are suspended and PHAs need not review utility allowances until December 31, 2020.HUD is temporarily suspending the Public Housing Assessment System (PHAS) and the Section 8 Management Assessment Program (SEMAP) for PHAs with a fiscal year end on or before December 31, 2020; HUD will begin issuing new PHAS and SEMAP scores for PHAs with fiscal year end dates of March 31, 2021.Financial statement submission deadlines have been extended by six months.Through December 31, 2020, PHAs have 90 - rather than 60 - days to submit form HUD-50058 for transactions impacted by these waivers. HUD will provide future guidance regarding reporting work-arounds in the PIH Information Center (PIC) system. The CARES Act also provides supplemental funding for the Public Housing and HCV programs and additional flexibility to move monies between Operating and Capital Funds. HUD published additional guidance regarding these aspects of the CARES Act on Notices PIH 2020-07 and 2020-08.

Webinar on Average Income Requirements & Best Practices

A. J. Johnson will be conducting a webinar on July 14, 2020 on Requirements & Best Practices Relating to the Average Income Minimum Set-Aside for LIHTC Properties. The Webinar will be held at 1:00 PM Eastern Time. The Average Income Minimum Set-Aside Test ("AI") was added to the LIHTC program in March 2018. While it is being implemented successfully on many properties, there remains a good deal of industry-wide confusion about the use of the AI set-aside and the risks involved.  This one-hour live webinar will review the requirements of the AI, discuss the risks of this set-aside, and provide best practice recommendations for implementation of the Average Income test. The Webinar will be presented by A. J. Johnson, a nationally recognized expert on affordable housing who has already provided compliance oversight on multiple properties using the AI set-aside. Those interested in participating in the Webinar may register on the A. J. Johnson Consulting Services website (www.ajjcs.net) under "Training."

Illegal Steering - Recent Fair Housing Settlement Shows Feds Lack of Tolerance for the Practice

The United States Department of Housing & Urban Development (HUD) reached a Settlement Agreement with the Decatur (AL) Housing Authority on June 26 after a HUD compliance review determined that the Authority maintained discriminatory housing practices in three of its senior properties. Specifically, HUD s review revealed that the housing authority discriminated against elderly black applicants who applied for housing at more desirable properties (The Towers) by repeatedly skipping over them on the wait list even though they were supposed to be the next applicant to be housed. Black applicants were also steered to less desirable units at one of the housing authority s racially and ethnically concentrated properties (Westgate Gardens). HUD conducted a compliance review to assess the housing authority s compliance with Title VI of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, color, and national origin in programs receiving federal financial assistance. In addition, the Fair Housing Act makes it unlawful to discriminate in the rental or sale of housing due to national origin, race, color, religion, sex, familial status or disability. As a result of the review, HUD identified discrimination in the housing authority s rental policies, waiting lists, and transfer requests with regard to its senior residents. Under the terms of the agreement, the housing authority will pay $200,000 in damages by creating a victims fund and providing direct compensation to the residents harmed by the discriminatory practice. The Agency will also update its policies relating to its waiting and transfer lists and evictions, and train current and new employees who have contact with applicants or residents above Title VI, the Fair Housing Act, and other applicable civil rights requirements, with a specific emphasis on discrimination based on race, color, and national origin. This settlement makes clear that the Federal government will not tolerate illegal steering in the provision of housing. Owners and managers must ensure that resident selection policies and waiting lists are administered in a way that does not give any preference based on a protected characteristic. Ongoing review of these policies is recommended as is strong oversight of staff in order to prevent they type of discriminatory practice represented by this Settlement Agreement.

IRS Releases Major LIHTC Program Guidance - July 1, 2020

On July 1, 2020, the IRS released an advanced copy of proposed regulations concerning low-income housing tax credit (LIHTC) housing finance agency (HFA) monitoring requirements and Notice 2020-53, which provides COVID-19 related relief to issuers, owners, operators, and tenants of tax credit properties. Following is a detailed discussion of both documents. Low-Income Housing Tax Credit Compliance-Monitoring Regulations - Proposed Rule This document contains proposed regulations relating to the compliance monitoring duties of housing finance agencies (HFAs) under 42 of the Internal Revenue Code. These proposed regulations would relax the minimum compliance monitoring sampling requirement for purposes of physical inspections and review of tenant files that were published in the Federal Register on February 26, 2019. The 2019 regulation required HFAs to inspect no fewer units than the number specified for projects of the relevant size in HUD REAC inspections. This increased the sample size for smaller projects and decreased it for larger projects. All QAPs were to be amended to incorporate these new requirements no later than December 31, 2020. This proposed regulation is the result of comments provided by industry groups, including HFAs, and trade groups (including the National Council for State Housing Finance Agencies). A major concern of the HFAs was that the 2019 regulation ended Agencies ability to use samples of 20 percent of the low-income units in a project when the applicable REAC number is larger. The 2019 requirement increased the number of units that HFAs must examine, increasing Agency costs for additional staff and related expenditures. The IRS implemented the 2019 regulation in order to ensure an increased statistical confidence that results from the use of the REAC numbers to determine sample sizes for smaller projects. However, the Service agrees that the magnitude of the increased costs and burdens on HFAs outweighs any benefit that may have been derived from the 2019 protocol. For this reason, the IRS is proposing to return to the sample-size requirements that applied under Temporary Regulations issued in 2016. Thus, under the proposed regulation, the minimum number of low-income units that must be included in the random samples of units and files to be reviewed is the lesser of the applicable REAC number or 20% of the low-income units in the project, rounded up to the next whole number. Example of Impact The 2019 Regulation required a minimum of 18 units to be reviewed (files and physical) for a 50 unit project;The proposed regulation would require a ten file/unit review. Proposed Applicability Date This proposed regulation would apply after the date the regulation is published as a final regulation in the Federal Register. However, HFAs may rely on the proposed regulation beginning on February 26, 2019, until December 31 of the calendar year following the year that contains the date these regulations are published as final regulations.  For example, if the final regulation is published in November 2020, and changes from the proposed regulation, HFAs will be able to use the requirements outlined in the proposed regulation until December 31, 2021. IRS Notice 2020-53, COVID-19 Relief for LIHTC Projects In response to the COVID-19 pandemic, this notice provides 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. 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 December 31, 2020, the last day for the owner to meet the 10% test is postponed to December 31, 2020.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 December 31, 2020, the last day for the owner to incur the minimum rehabilitation expenditures is postponed to December 31, 2020.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, due to a prior 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, and before December 31, 2020, the last day for the owner of the building to complete the repair and restoration is December 31, 2020.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 December 31, 2020, is postponed to December 31, 2020.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 December 31, 2020, the last day of that period is postponed to December 31, 2020.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 December 31, 2020. The owner must resume the income recertifications as due after December 31, 2020.E.g., a recertification that is due on November 1, 2020 does not have to be performed. The next recertification will be due on November 1, 2021, 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 December 31, 2020. The Agency must resume compliance monitoring inspections or reviews as due under 1.42-5 after December 31, 2020.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 December 31, 2020, 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.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 December 31, 2020, 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. Effective Date: this Notice is effective as of July 1, 2020 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.