News

Self-Employed Individuals in Affordable Housing Properties

One of the most difficult type of income to determine for managers of affordable housing rental properties (e.g. Section 8 or Low-Income Housing Tax Credit [LIHTC]) is self-employment income. Based on the number of issues we see when reviewing the tenant files of clients and the questions I receive on the subject during training, a discussion of best practices with regard to verifying and projecting income from self-employment is in order.   All affordable housing programs require that income from businesses be counted as part of household income, and virtually all such programs follow guidance of the Department of Housing & Urban Development (HUD) in how to deal with self-employment income. This includes the LIHTC program, for which the IRS has provided additional guidance relative to self-employed individuals.   Income from a Business   The net income from the operation of a business, profession, or sole proprietorship businesses is included in income. Net income is gross income less business expenses, interest on loans, and depreciation computed on a straight-line basis. Salaries paid to the applicant or other household members from the business must also be identified and included in income. In addition, cash and assets withdrawn by family members must be included in income except when the withdrawal is a reimbursement of cash or assets invested in the business.   Business expenses do not include principal payments on loans, interest on loans for business expansion or capital improvements, or other expenses for business expansion or outlays for capital improvements.   If the net income from a business is negative, it must be counted as zero income. A negative amount cannot be used to offset other family income.   Example: Negative Income from a Sole Proprietorship John and Mary, a married couple, apply for LIHTC housing. John operates a sole proprietorship business. The net income from the business after expenses in 2017 was -$3,500. Mary earns $27,000 annually as an employee, as verified by management with her employer. The household s income is $27,000; the $3,500 loss by John s business cannot be used to offset Mary s wages.   Income from a business can be estimated by reviewing the individual s prior year tax returns and Schedule C. If necessary, the owner can ask the potential resident to provide a signed Form 8821, Tax Information Authorization, or Form 4506-T, Request for Transcript of Tax Returns, which will allow the owner to verify the information with the IRS. Another option is to request that a copy of the transcripts be sent directly to the potential resident from the IRS by using the automated phone system (1-800-908-9946). While the transcript will be sent to the applicant and they will have to bring it to the manager, this process is faster and the applicant will normally receive the transcript(s) within ten days. It should be noted that a tax return must be filed for all self-employed individuals who operate sole proprietorship businesses or otherwise report income on Schedule C, regardless of whether the taxpayer is reporting a profit or loss. If a person is not eligible to get a Social Security Number, which is needed to file a tax return, an individual taxpayer identification number (ITIN) can be obtained using IRS Form W-7.   Income Projection Methods   There are a number of acceptable methods for projecting income from self-employment; three examples follow:   Example 1: A potential LIHTC tenant has been self-employed for four years and provides a self-employment affidavit (which is always recommended) stating that the anticipated net income for the upcoming year is $22,000. Tax return for 2014, 2015, and 2016 are obtained and show the following net income: 2014: $13,000 2015: $18,000 2016: $20,000 Based on the trend as shown on the tax returns, the estimated amount on the self-employment affidavit appears reasonable and may be used. However, if the 2016 return showed net income of $26,000, the applicant should be required to provide a credible reason for the anticipated reduction in income, and if they could not, the income should either be trended based on the percentage increase from year-to-year or the 2016 income should be used - depending on the circumstances.   Example 2: A potential LIHTC tenant has been self-employed for just over one year and provides a self-employment affidavit stating that the anticipated net income for the upcoming year is $22,000. The 2016 tax return is obtained and shows that $22,000 was the net income in 2016. It is reasonable to project $22,000 as the income from the business.   Example 3: The potential tenant has only been self-employed for nine months and no tax return has yet been filed. Income may be annualized based on the number of full months in business. The formula is:   (Net Income Year to Date) x 12 Months _________________________________________________________ Number of Months in Business during the Current Year   So, if for the nine months of the year in business the applicant had earned net income of $24,000, the formula is:   $24,000 X 12 = $288,000 9 months + $32,000 anticipated net income.   Home Businesses   A low-income tenant may use a portion of a low-income unit exclusively and on a regular basis as a principle place of business, and claim the associated expenses as tax deductions, as long as the unit is the tenant s primary residence. If the tenant is providing daycare services, the tenant must have applied for (and not have been rejected), be granted (and still have in effect), or be exempt from having a license, certification, registration, or approval as a daycare facility or home under state law. IRS Form 8829, Expenses for Business Use of Your Home, and Publication 587, Business Use of Your Home, provide additional guidance on acceptable deduction from business income for home businesses.   Example: A self-employed bookkeeper wants to rent a two bedroom unit and intends to use one bedroom as her principle place of business; i.e., to provide bookkeeping services. She provides her tax return for the last year, which includes a Schedule C, as a verification of her income. The Schedule C includes an "office expense" for her home office in a prior residence. Use of a unit in this way meets the requirements of the LIHTC program, but it should be noted that Section 8 residents would not be able to use the second bedroom as a dedicated office.   Income from Rental Property, Partnerships, and S-Corporations   Rental property may be real estate or personal property such as equipment or vehicles. The tenant may have income from enterprises doing business as partnerships or S-Corporations, or receive royalties for copyrights or patents.   The key, when determining income for self-employed individuals, is to obtain enough information to reasonably project likely income for a 12-month period. As noted, tax returns are the preferred method of verifying such income, but financial statements (audited or unaudited) are acceptable when tax returns are not available. Also, it is strongly recommended that self-employed individuals always provide "Affidavits of Self-Employment" on which they state their anticipated income for the upcoming year.

NCSHA Publishes 2017 Recommended Best Practices

The National Council of State Housing Agencies (NCSHA) has updated its Recommended Practices in Housing Credit Administration for voluntary adoption by Housing Credit Agencies. The organizations first recommended practices were published in 1993, and included recommendations relative to allocation and underwriting. These recommended practices were updated in 1998. In 2000, NCSHA published its first recommended practices relative to Housing Credit compliance monitoring, and in that same year, provided further updates to recommendations relating to allocation and underwriting, with additional recommendations provided in 2009 and 2010. This new series or recommendations includes significant revisions to many recommended practices in allocation, underwriting, and compliance monitoring. There are also 13 new Recommended Practices. This new report was approved by the NCSHA Board of Directors in December 2017. It is important to remember that these recommendations are voluntary, and no Housing Credit Agency (HCA) is obligated to adopt them. The report outlines recommendations in 46 separate areas; highlights of some of the major changes in recommended policies are noted in this memo. Development Costs: the report recommends that "In addition to carefully calculating the amount of housing credit allocated to eligible developments, as federal law requires, each allocating agency should develop a standard for limiting development costs to reasonable amounts. This standard may take the form of a development cost limit, calculated on a per unit, per bedroom, or square footage basis." The report also urges each allocating agency to have a general developer fee limit (which virtually all have already done). Agencies are also being urged to define what an acceptable consulting fee is and to review those fees - including at minimum fees for architectural, engineering, environmental, accounting, legal, market analysis, construction management, and asset management services - at project application and compare them with professional fees charged in developments awarded credits in prior funding cycles and with current applications. Preservation: The report recommends that HCAs should develop QAP policies on the use of 9% and 4% credits for preservation, including specific policies on resyndication of existing LIHTC projects. Qualified Contracts: In one of the more controversial areas of the report, NCSHA recommends that agencies "require all applicants to waive their right to submit a qualified contract as a condition of receiving an allocation. The waiver requirement should apply to applicants for both 9% and 4% credits financed with tax-exempt multifamily bonds." Many HCAs already require applicants to waive the right to seek a qualified contract at the time a credit allocation is made, while others provide scoring incentives for applicants that agree to waive the right to a qualified contract. This recommendation is particularly interesting in that it recommends requiring that developers be required to waive a right provided by federal law in order to participate in a federal program. To date, I know of no one who has challenged the legality of such a provision, but it would make for an intriguing case. Reducing Local Barriers to Development: NCSHA also seeks to address concerns about local requirements and support for LIHTC proposals. While inviting local jurisdiction comment on proposed LIHTC developments is required by statute, agencies should not require local approval (for example, a letter of support) as a threshold qualification or allocate points for local approval as part of a competitive scoring system. Moreover, agencies should not require local financial contributions as a condition for receiving a housing credit allocation, says the report. This practice came under harsh criticism in a recent GAO report on State Agency implementation of the program. Construction Monitoring: Construction monitoring is a new recommended practice. In addition to visiting proposed development sites prior to allocation of credits, HFAs should inspect or require an independent third-party inspection of credit developments during the construction period to monitor construction progress, verify application commitments, evaluate compliance with fair housing and accessibility rules, and identify construction delays, says the report. To avoid duplication of efforts, agencies may coordinate with investors, syndicators, lenders, or other entities to receive copies of construction monitoring reports conducted by these entities. Agencies have found that site visits to developments during the construction phase help monitor construction progress and identify potential timing delays. These visits also help make sure that developments adhere to commitments made at the time of application and with fair housing and accessibility rules. Violence Against Women Act (VAWA) Compliance: The report recommends that agencies adopt specific policies and procedures relative to implementation of VAWA. The recommendation essentially follows the procedures outlined by HUD for implementation of VAWA at HUD properties. Owner & Manager Training: The report recommends that agencies require that owners and on-site managers of LIHTC projects receive LIHTC specific training no later than issuance of an 8609. The report states that "Agencies should consider requiring certification or professional designation of Housing Credit property managers." As noted, recommendations are made in 49 separate areas, but most have not changed from prior recommendations. Interestingly, there are no major recommended changes regarding compliance monitoring, and the report generally indicates that agencies should defer to HUD rules in terms of monitoring for resident income eligibility. Most importantly, owners and managers should keep in mind that these recommendations are just that - recommendations. There is no requirement for any HCA to implement any of the recommendations.        

HUD Delays Fair Housing Affirmative Action Rule

In what is almost certainly the first step in elimination of the requirement that localities take proactive steps to affirmatively further fair housing, HUD is extending the deadline for submission of assessment of fair housing for Consolidated Plan Participants. This extension was published in the Federal Register on January 5, 2018. It extends the deadline for submission of an Assessment of Fair Housing (AFH) by local government consolidated plan program participants to their next AFH submission date that falls after October 31, 2020. According to the Notice, while program participants will not be required to submit an AFH, they are still required to continue to comply with existing obligations to affirmatively further fair housing. Local governments that have already submitted an AFH that has been accepted by HUD must continue to execute the goals of that AFH. The original concept of the Obama era policy was to provide an enforcement mechanism to a federal Civil Rights law requirement that local governments take affirmative steps to undo racial segregation. HUD is now saying that the extension is simply to give communities more time to deal with the complex requirements of the ruling. However, the more likely explanation is that this delay is designed to ultimately kill the regulation and implement the desire of Ben Carson, the HUD Secretary, to do away with "social engineering," as he called this program before he was appointed HUD Secretary. Based on this Notice, it is likely that communities that were in the process of complying with the AFH requirements of the prior regulation will simply cease their activities in this area, returning to the status quo of giving localities virtually unfettered ability to decide if and when to pursue desegregation policies. This obviously impacts the provision of affordable housing, since many localities restrict the development of affordable housing to areas that are already impacted by poverty and limited opportunity.

Correction to State Minimum Wage Increases

I recently published a news item on upcoming minimum wage increases across the United States. One of my clients found an error in the information for New York State and I wanted to correct the item. The correct information for New York is shown below.   For workers in a number of states, the new year will bring an increase in minimum wages. Many of the states already had minimum wage levels higher than the federal minimum of $7.25 per hour.   Owners and managers of properties that are required to verify applicant incomes for eligibility purposes should be aware of the minimum wage laws in all states in which they have properties and ensure that unless exempt from minimum wage, all employed applicants earn at least the higher of the federal or state minimum wage.   Following is a list of the states that will have minimum wage increases in 2018:   Alaska: $9.80 to $9.84 Arizona: $10.00 to $10.50 California: $10.50 to $11.00 Colorado: $9.30 to $10.20 Florida: $8.10 to $8.25 Hawaii: $9.25 to $10.10 Maine: $9.00 to $10.00 Michigan: $8.90 to $9.25 Minnesota: $9.50 to $9.65 (small employers go from $7.75 to $7.87) Missouri: $7.70 to $7.85 Montana: $8.15 to $8.30 New Jersey: $8.44 to $8.60 New York: $9.70 to as $10.40 ($13.00 in New York City for employers with more than ten employees and $12.00 for ten or fewer employees. Long Island and Westchester will have a new minimum wage of $11.00, up from $10.00) Ohio: $8.15 to $8.30 Rhode Island: $9.60 to $10.10 South Dakota: $8.65 to $8.85 Vermont: $10.00 to $10.50 Washington: $11.00 to $11.50   Keep in mind that these are the states that will have increases in the minimum wage this year; there are other states with a minimum wage higher than the federal minimum.   In addition to those noted above, states and territories with minimum wages higher than the federal minimum are: *Arkansas; *Connecticut; *Delaware; *District of Columbia; *Guam; *Illinois; *Maryland; *Massachusetts; *Nebraska; *Nevada; *New Mexico; *Oregon; *Virgin Islands; and *West Virginia   Please feel free to contact me with any questions.   AJ      

Tips for Spotting Elder Care Abuse in Senior Housing

I often get expressions of concern from some of my clients who own or manage housing for seniors regarding the well-being of their residents - especially in cases where there may be some type of abuse of the elderly by family members or other individuals. While our job is to provide housing, and not act as social workers or even advocates for our residents, it is important for managers of senior housing to at least be able to recognize the signs of potential elder abuse, which can take the form of physical abuse or financial abuse - or both. Once we are able to recognize the signs of abuse, it can be reported to the appropriate authorities.   In this article, I want to focus on the signs of financial exploitation, which is often harder to detect than physical abuse.   What is Elder Financial Exploitation?   Elder financial abuse, also known as financial exploitation, is the illegal or unauthorized use of an older adult s funds or resources for the benefit of someone other than the older adult. This includes fraud, theft, and acts of deception to gain control over a senior s money or property.   Signs of Financial Exploitation   Some of the indicators of financial exploitation listed below can be explained by other causes or factors and no single indicator can be taken as conclusive proof of abuse. Rather, one should look for patterns or clusters of indicators that suggest a problem. Unpaid bills, eviction notices, or notices to discontinue utilities; Withdrawals from bank accounts or transfers between accounts that the older person cannot explain; Bank statements and cancelled checks no longer come to the elder s home; New "best friends;" Legal documents, such as powers of attorney, which the older person didn t understand at the time he or she signed them; Unusual activity in the older person s bank accounts including large, unexplained withdrawals, frequent transfers between accounts, or ATM withdrawals; The care of the elder is not commensurate with the size of his/her estate; A caregiver expresses excessive interest in the amount of money being spent on the older person; Belongings or property are missing; Suspicious signatures or checks or other documents; Absence of documentation about financial arrangements; Implausible explanations given about the elderly person s finances by the elder or the caregiver; or The elder is unaware of, or does not understand, financial arrangements that have been made for him or her.   There are many types of senior financial abuse, but here are some of the more common:   Telemarketing & Internet Fraud: Targeting victims through the mail, phone, or email - characterized by aggressive tactics along with the use of false promises of cash prizes, goods, or services in exchange for paying fees or making purchases. Identity Theft & Credit Card Fraud: Gaining access to a senior s personal information to take money and property. This includes tax ID theft where a scammer uses a senior s Social Security number to file a tax return and steal the refund, or impersonates the IRS and tells the senior that the IRS is owed money. Grandparent Scam: Pretending to be a grandchild in trouble in order to convince the senior to wire money or send prepaid debit cards. Sweepstakes & Lottery Scams: A widely practiced form of telemarketing fraud, scammers tell seniors that they have won a lottery or sweepstakes. The catch is, the senior must make a small payment or pay a fee to receive the alleged prize. Seniors may also receive a fake check back from the scammer, which will "bounce" after it gets deposited. Investment Schemes and Frauds: Unscrupulous professional investors try to sell inappropriate, unethical, or confusing investment products to seniors, or from con artists claiming to be "Nigerian prince" or some other wealth foreigner who asks for the seniors bank account number to transfer millions of dollars into their account. Healthcare Scams: Getting information about a senior s medical accounts - like Medicare and Medicaid - in order to make fraudulent claims and take advantage of these taxpayer programs.   If managers or owners of senior housing properties become aware of suspicious activity involving a senior resident, it is recommended that you contact your local senior service agency or the police. These organizations will be able to advise you on the next step to take, or may open an investigation of their own.

Streamlining HUD Regulations - Interim Final Rule - December 12, 2017

The Department of Housing and Urban Development (HUD) published an Interim Final Rule in the Federal Register on December 12, 2017, titled "Streamlining Administrative Regulations for Multifamily Housing Programs and Implementing Family Income Reviews Under the Fixing America s Surface Transportation (FAST) Act."   Background   On March 8, 2016, HUD published a Final Rule streamlining regulatory requirements pertaining to certain elements of the Housing Choice Voucher (HCV), Public Housing (PH) and Multifamily Housing (MFH) rental assistance programs. One of the major changes related to annual income reviews in the HCV, PH and Section 8 Project Based Rental Assistance (PBRA) programs for families with sources of fixed income. On December 4, 2015, President Obama signed the FAST Act into law. The law contained language that allowed PHAs and owners to conduct full income recertifications for families with 90% or more of their income from fixed income every three years instead of annually. This Interim Final Rule aligns the current regulatory flexibilities from the March 2016 final rule with those provided under the FAST Act.   Comments on this Interim Final Rule are due by January 11, 2018, and the rule will be effective on March 12, 2018.   Summary of the Interim Final Rule   Streamlined Certification of Fixed Income During years two and three after a full income review, PHAs and owners in the HCV, PH, and PBRA programs may determine a family s fixed income by using a verified COLA or rate of interest on the individual sources of fixed income. In the case of a family with at least 90% of the family s unadjusted income from fixed income, a PHA or owner using streamlined income verification may, but is not require to, adjust the non-fixed income. For families with at least one source of fixed income, but for which less than 90% of the family s income is from fixed sources, PHAs and owners must verify and adjust non-fixed sources annually. This interim final rule does not change the requirement that full recertifications must be done every three years. Families must certify that all the information they submit for income verification, including sources of income, is accurate. Utility Reimbursements Where tenants pay for their utility usage, owners must reimburse tenants if the utility allowance (UA) exceeds the total tenant payment. This interim final rule explicitly allows owners to make reimbursements of $45 or less (per quarter) on a quarterly basis, in order to eliminate the burdensome process of processing and mailing monthly reimbursement checks. In the event a family leaves the program in advance of its next quarterly reimbursement, the owner will be required to reimburse the family for a prorated share of the applicable reimbursement. If owners choose to take advantage of this quarterly reimbursement provision, they must have a policy in place to assist tenants for whom the quarterly reimbursements will pose a financial hardship. For the Section 202 and 811 programs, the regulations do not contain the requirements around utility reimbursements, leaving such requirements in the assistance contracts. Owners of these projects wishing to use the quarterly reimbursements will have to contact HUD to amend the assistance contracts. Family Declaration of Assets Under $5,000 This rule amends the regulations so that, for a family that has assets equal to or less than $5,000, an owner, at recertification, may accept a family s declaration that it has net assets equal to or less than $5,000, without annually taking additional steps to verify the accuracy of the declaration. Third-party verification of all family assets will be required every three years. The regulations allow owners in the Section 202 and 811 programs to require tenants to provide the same certification of assets allowed in the HCV, PH, and PBRA programs.   In the March 8, 2016, final rule, the provisions relating to utility allowance reimbursements and asset certification applied to the HCV and PH programs only. This rule expands these same policies to the MFH programs.   As noted above, while this is a "final" rule, it is an "interim" final rule, and does not go into effect until March 12, 2018. This will give HUD time to review any comments on the rule and make necessary changes prior to the effective date.

Minimum Wage Increases in 18 States

Happy New Year! For workers in a number of states, the new year will bring an increase in minimum wages. Many of the states already had minimum wage levels higher than the federal minimum of $7.25 per hour   Owners and managers of properties that are required to verify applicant incomes for eligibility purposes should be aware of the minimum wage laws in all states in which they have properties and ensure that unless exempt from minimum wage, all employed applicants earn at least the higher of the federal or state minimum wage.   Following is a list of the states that will have minimum wage increases in 2018:   Alaska: $9.80 to $9.84 Arizona: $10.00 to $10.50 California: $10.50 to $11.00 Colorado: $9.30 to $10.20 Florida: $8.10 to $8.25 Hawaii: $9.25 to $10.10 Maine: $9.00 to $10.00 Michigan: $8.90 to $9.25 Minnesota: $9.50 to $9.65 (small employers go from $7.75 to $7.87) Missouri: $7.70 to $7.85 Montana: $8.15 to $8.30 New Jersey: $8.44 to $8.60 New York: $10.75 to as $11.75 ($13.50 in New York City) Ohio: $8.15 to $8.30 Rhode Island: $9.60 to $10.10 South Dakota: $8.65 to $8.85 Vermont: $10.00 to $10.50 Washington: $11.00 to $11.50   Keep in mind that these are the states that will have increases in the minimum wage this year; there are other states with a minimum wage higher than the federal minimum.   In addition to those noted above, states and territories with minimum wages higher than the federal minimum are: *Arkansas; *Connecticut; *Delaware; *District of Columbia; *Guam; *Illinois; *Maryland; *Massachusetts; *Nebraska; *Nevada; *New Mexico; *Oregon; *Virgin Islands; and *West Virginia

Additional HUD VAWA Guidance - November 2017

The Department of Housing & Urban Development (HUD) recently issued clarifying guidance regarding the Violence Against Women Act (VAWA). The guidance addresses the following areas of VAWA: Applicability; Notice of Occupancy Rights & Certification Form; Emergency Transfers; Lease Addendum; Lease Bifurcation; and General Issues   This memo will outline the guidance provided by HUD, for each of the categories. Of critical importance is the HUD guidance regarding the Model Emergency Transfer Plan (see #4 under Notice of Occupancy Rights & Certification Form below).   Applicability   In addition to regular Section 8 projects, what other projects are required to comply with the VAWA 2013 Final Rule? VAWA 2013 applies to privately owned HUD-assisted properties under several types of contracts. It applies to PRAC projects (202 and 811) as well as Section 811 Project Rental Assistance (PRA), 202 Senior Preservation Rental Assistance Contract (SPRAC), and 202 Project Assistance Contract (PAC) projects. Other covered housing includes Section 236, 221(d)(3) and 221(d)(5) properties financed with a below-market or subsidized interest rate loan. If a property does not receive HUD rental subsidy or does not have a subsidized loan, the property is exempt. Are properties with HUD-insured loans subject to the VAWA rules? No, unless the property operates with some type of HUD rental or interest rate subsidy program. Any resident who is eligible at move-in may continue to receive VAWA protections as long as they reside at a covered property, regardless of income increases at a later date. For example, if a Section 8 resident goes to market rate, they are still protected by VAWA.   Notice of Occupancy Rights & Certification Form   Form HUD-91066 "Certification of Domestic Violence, Dating Violence, or Stalking" is now obsolete and should no longer be used. It has been replaced with the Certification form titled, "Certification of Domestic Violence, Dating Violence, Sexual Assault, or Stalking, and Alternate Documentation" (form HUD-5382) for all covered multifamily housing programs. Owners/Agents (O/As) are required to provide translated documents when needed. All VAWA forms have been translated into Armenian, Cambodian, Creole, Japanese, Korean, Lao, Mandarin, Russian, Spanish, Thai, and Vietnamese and can be downloaded from Hudclips. O/As may customize the Notice of Occupancy Rights (form HUD-5380) to reflect the type of assistance provided under the specific housing program and to specify the program operations that may pertain to or affect VAWA. However, the form s core protections and confidentiality provisions may not be changed. HUD has provided a critical clarification regarding the Model Emergency Transfer Plan (form HUD-5381). This form is intended as a model only and provides guidance for completing a comprehensive plan. Using the model as published by HUD will not satisfy VAWA s Emergency Transfer Plan requirements. The O/A must customize the plan to meet all VAWA emergency transfer requirements. Additional information is provided below. Only one set of forms - Notice of Occupancy Rights (form HUD-5380) and the Certification Form (form HUD-5382) - must be given to each household. There is no requirement to give the forms to each household member. Although the VAWA Final Rule does not require applicants/tenants to sign a form acknowledging receipt of the forms, it is strongly recommended that O/As maintain a note or other documentation in each tenant file that indicates that each household was provided the required forms (forms HUD-5380 and 5382). This documentation should be provided at each of the following times: Household annual recertification between December 16, 2016 and December 15, 2017; At the time an applicant is denied assistance or admission; It should be noted that if an applicant goes to market rent due to an increase in income, assistance is being denied. Therefore, the owner must provide copies of the forms at that time. If assistance is later reinstated, the forms must be provided again. At the time a household is provided assistance or admission (i.e., at move-in); and With any notification of eviction or termination of assistance. Note - O/As do not need to provide the forms with subsequent notices sent for the same infraction. O/As are not required to provide the forms to all persons on the waiting list, and it is not necessary to include the forms in application packets. Since the VAWA Final Rule only applies to applicants and tenants of HUD covered housing programs, properties that have both project-based Section 8 and LIHTC units should seek guidance from the appropriate HFA for guidance in implementing VAWA for the LIHTC units that are not HUD-assisted. Note- O/As may choose to offer VAWA protections and remedies to all tenants and applicants. It is my recommendation that on layered projects of this type, all households be afforded VAWA protection.   Emergency Transfers   As noted above, the Model Emergency Transfer Plan (form HUD-5381) contains only general provisions of the comprehensive plan that O/As are required to prepare and implement. Adoption of the model plan without further information will not be sufficient to meet HUD requirements relative to the contents of an Emergency Transfer Plan. O/As must review the complete VAWA regulation and program specific HUD guidance when developing a specific plan. O/As are not required to provide copies of an Emergency Transfer Plan to each household. However, O/As must make the Plan available upon request and, when feasible, make copies readily available to the public. Since applicants are not residents, they are not eligible for emergency transfers. However, O/As may adopt an admission preference for applicants who are victims of domestic violence, dating violence, sexual assault, or stalking. If no such preference is adopted, applicants who are victims of domestic violence, dating violence, sexual assault, or stalking will be placed at the end of the admission waiting list. For this reason, I strongly recommend that such a preference be adopted. With regard to internal and external transfers, The VAWA Final Rule does not define transfer priorities. The O/A has discretion to set priorities for transfers, and any such priority must be outlined in the project s Emergency Transfer Plan. Any priorities must also be identified in the Tenant Selection Plan. However, all VAWA transfer requests should be considered emergencies, and should generally be given priority over any non-emergency transfer request. O/As that own or manage multiple properties are not required to make emergency transfers between properties in their portfolio. The transferring resident must reapply at each project. However, a management agent (with consent from owners) may implement a VAWA preference at all of their properties to give priority to residents of the agent s other managed properties, but are not required to do so. While issues relating to O/A liability should be addressed with the O/As legal counsel, HUD does not require or expect the O/A to determine whether a unit is safe from an abuser or ensure that a victim moves to a unit that is safe from an abuser. For purposes of emergency transfers under VAWA, a "safe unit" refers to a unit that the victim of domestic violence, dating violence, sexual assault, or stalking believes is safe. This assumes that VAWA confidentiality requirements are met. With regard to the moving costs of victims when transferring from one unit to another under the VAWA Emergency Transfer Plan, there is no HUD requirement that an O/A pay moving costs for the households. O/As should continue to follow the existing policies relative to transfer costs for affected projects.   Lease Addendum   Each adult household member must sign the VAWA Lease Addendum form. HUD will add additional signature lines in the updated VAWA Lease Addendum (form HUD-91067). 202/811 PRAC properties should not implement the VAWA Lease Addendum until HUD updates the form HUD-91067 to include those properties. This also applies to projects funded with 811 PRA, 202 SPRAC, and 202 PAC projects. The revised VAWA Lease Addendum will also include a bifurcation clause.   Other Issues   O/As may not require tenants to obtain restraining orders in order to document victim status. Except in the case of conflicting information, O/As are prohibited from requiring victims to provide third party documentation of victims of domestic violence, dating violence, sexual assault, or stalking. Even in such cases, the O/A must accept any of the types of documentation listed in the VAWA Certification form, HUD-5382. While an O/A cannot penalize a VAWA victim based on the fact that the victim still has a relationship with the abuser, VAWA does not limit the authority of an O/A to evict a tenant if the O/A can demonstrate that an actual and imminent threat to other tenants or those employed at or providing services to the property would be present if the tenant or lawful resident is not evicted or terminated from assistance. Confidentiality - the VAWA Final Rule does not require VAWA documentation to be maintained in a specific location. However, HUD s VAWA regulation restricts disclosure of VAWA information to individuals other than the victim unless specific conditions are met. O/As must not enter confidential information into any shared database. Because domestic violence often occurs within the household, and the members of the household can review the tenant file, the regulation requires confidential record keeping in a location other than the tenant file. This requirement is also contained in HUD Handbook 4350.3. All information relating to an individual s experience with domestic violence, dating violence, sexual assault, or stalking must be kept in a file that is in a separate and secure location from other tenant files.   The VAWA regulations are complex and far-reaching. O/As need to develop comprehensive policies relating to the VAWA requirements and need to ensure that all staff who may be required to participate in the implementation of the VAWA regulations be adequately trained in the HUD requirements. The clarifications outlined in this memo should be shared with that staff.