News

DOJ Announces New Sexual Harassment in Housing Initiative

On October 19, 2017, the United States Department of Justice (DOJ) announced a new initiative to combat sexual harassment in housing. The initiative specifically seeks to increase DOJ efforts to protect women from harassment by landlords, property managers, maintenance workers, security guards, and other employees and representatives of rental property owners. The DOJ will work to identify barriers to reporting sexual harassment to the department and other enforcement agencies (such as HUD), and will collaborate with local law enforcement, legal service providers, and public housing agencies (PHAs). The Civil Rights Division of DOJ will launch this initiative as a pilot program in Washington DC and western Virginia, where it is working with local legal service providers and law enforcement to raise awareness of the problem, which has grown more acute since the beginning of 2017. The department hopes to expand the program to other areas of the country in the near future. The DOJ recently resolved two high profile sexual harassment cases in Kansas City, KS and Grand Rapids, MI. In the Kansas City case, the department recovered $360,000 for 14 female residents and applicants of a housing authority who were subjected to unwanted sexual conduct. In this case, an employee of the PHA subjected women to unwanted sexual conduct as a requirement for favorable hearing decisions, including asking them sexual questions, showing pornographic pictures and videos, making explicit sexual comments, and exposing himself. In the Michigan case, the owner and manager of a private rental housing complex agreed to a $150,000 settlement to resolve allegations of sexual harassment against female residents and applicants, including making unwelcome sexual comments and advances toward them, engaging in unwelcome sexual touching, offering housing benefits in exchange for sex acts, and taking or threatening to take adverse housing actions against women who objected. This increased level of federal activity relative to sexual harassment in housing is a reminder to all housing owners and managers of the importance of a strong, dedicated sexual harassment policy. All companies should have a zero-tolerance policy against sexual harassment, to include: Have a clear, written policy that sexual harassment of any kind will not be tolerated and will result in prompt disciplinary action; Offer examples of prohibited conduct, such as Explicitly or implicitly suggesting sex in return for living in the community, receipt of services, or otherwise related to the terms and conditions of the tenancy; Suggesting or implying that failure to accept a date or sex would adversely affect a resident s tenancy;3. Initiating unwanted physical contact, such as touching, grabbing or pinching;4. Making sexually suggestive or obscene comments, jokes or propositions; and5. Displaying sexually suggestive photos, cartoons, videos or objects. The policy should encourage anyone who feels they have been sexually harassed to file a complaint, and provide details on how to do so. It is also important to remember that employers face findings of vicarious liability in sexual harassment cases, meaning that an employer can be find liable for the action of employees - even when the actions were unknown to the employer. Strong, affirmative harassment policies can help limit such liability.

Reminder - Deadline for VAWA Notice of Occupancy Rights Approaching

One of the requirements of the HUD Final Rule on the Violence Against Women Act (VAWA) is that a copy of the Notice of Occupancy Rights, form HUD-5380, must be provided to applicants and residents. This form, along with the certification form HUD-5382 must be provided to existing households, applicants, and new move-ins/initial certifications no later than each of the following times: For applicants - At the time the household is provided assistance or admission (i.e., move-in [MI] or initial certification [IC]); and At the time the applicant is denied assistance or admission. For existing households - Through December 15, 2017, at each household s annual recertification [AR]; and With any notification of eviction or termination of assistance (but not with subsequent eviction or termination notices sent for the same infraction). If households have already had their AR for 2017 and there were not provided with the forms, the owner/agent (OA) must provide the forms to those households through other means no later than December 15, 2017. A note or documentation must be made in those tenant files indicating when the forms were provided to the household. While not required, I recommend having the households sign an acknowledgement that the forms were received. This requirement is applicable to the following programs: Project-based Section 8 programs under the United States Housing Act of 1937; New Construction State agency financed Substantial rehabilitation Section 202/8 Rural Housing Services (RHS) Section 515/8 Loan Management Set-Aside (LMSA) Property Disposition Set-Aside (PDSA) Section 202/162 Project Assistance Contract (PAC); Section 202 Project Rental Assistance Contract (PRAC); Section 202 Senior Preservation Rental Assistance Contracts (SPRAC); Section 811 PRAC; Section 811 Project Rental Assistance (PRA) Section 236 (including RAP); and Section 221(d)(3)/(d)(5) Below Market Interest Rate (BMIR)  

Occupancy Standards - One Person Limit in Studio Apartments May be Too Restrictive

A recent court case (Fair Housing Center of Washington v. Breier-Scheetz Properties, LLC, May 2017) found that a Washington community s rule limiting studio apartments to one occupant violated fair housing law based on familial status. Facts of the Case The 96-unit community contained a combination of studio and one-bedroom apartments. The studio apartments ranged in size from 425 square feet to 560 square feet. The community limited occupancy in the studio apartments to no more than one person. This policy was confirmed during testing by a fair housing testing organization. The testing organization filed a fair housing suit, alleging that the community applied a facially neutral occupancy restriction that resulted in a disparate, adverse effect based on familial status. Decision The court ruled in favor of the fair housing testing organization, stating that the community violated fair housing law by applying an overly restrictive occupancy policy that had an adverse impact on families with children. Reasoning The fair housing group was able to prove that the community s practice had an adverse impact on a protected characteristic - in this case, families with children. The group provided statistical evidence from an expert demonstrating that the policy had a greater impact on families with children versus other potential applicants. The burden then fell on the community to show that they had a legitimate, nondiscriminatory business reason for the policy, and that the policy was the least restrictive way to achieve that purpose. The community offered two reasons for the policy: Because the building was master-metered for utilities, the community developed a "formula" for billing the cost of utilities to residents. The community argued that allowing more than one occupant in a studio apartment would require the installation of meters in every unit in order to ensure a fail billing system; and The configuration of the studio units was designed to accommodate only one person. The Court rejected both arguments: The Court found that the argument relating to the billing of utility costs was nothing more than an arbitrary, after-the-fact justification for the discriminatory policy. There were clearly other ways to establish a fair billing system; and The community failed to provide evidence that the units could not adequately accommodate more than one person. In fact, the city code permitted two people in studio apartments as small as 150 square feet. Conclusion Always check applicable state and local occupancy codes when developing property occupancy policies. Federal fair housing law generally defers to state and local restrictions regarding occupancy, and following such requirements will make it difficult for your policy to be challenged. If there are no applicable state or local requirements, an occupancy policy of two people per bedroom, plus one, and two persons for studio units, is generally considered reasonable.

Limited English Proficiency and Fair Housing

I recently came across a situation where an owner of a multifamily property had a policy of requiring that all applicants be able to communicate in English in order to apply for occupancy at the property. After discussing the issue with the owner, he was clearly unaware that such a practice may be construed as a violation of Federal fair housing law. A review of the relationship between the Fair Housing Act and limited proficiency in English is worthwhile. While people with limited proficiency in English (known in HUD programs as Limited English Proficiency or LEP) are not a protected class under the Fair Housing Act (FHA), HUD has determined that the ability to communicate proficiently in English is closely related to national origin, which is a protected class. HUD has issued guidance on protections for persons with LEP (HUD Office of General Counsel Guidance on Fair Housing Act Protections for Persons with Limited English Proficiency, September 15, 2016). The guidance indicates that a housing provider will violate the FHA by using a person s LEP to discriminate intentionally because of race, national origin, or another protected characteristic. In such cases, the use of language-related criteria by a housing provider will be analyzed in the same way as other potentially discriminatory criteria, and intentional discrimination can be established through direct or circumstantial evidence. Under the guidance, suspect practices include advertisements stating all tenants must speak English and rejecting all applicants who are not fluent in English. In addition, restrictions on tenants speaking other languages on the property have no perceivable justification under the FHA. The guidance notes that some courts have recognized employers requirements that employees speak English as legitimate defenses against discrimination claims under Title VII of the Civil Rights Act of 1964, but it says the justifications for such requirements would be inapplicable to FHA claims. In addition to intentional discrimination, the guidance says the use of LEP to make housing decisions could subject a housing provider to discriminatory effects liability under the FHA. Specifically, the guidance says that when a policy or practice restricting access to housing on the basis of LEP has a discriminatory effect based on national origin, race, or some other protected characteristic, the policy or practice will violate the FHA if it is not necessary to serve a substantial, legitimate, nondiscriminatory interest of the housing provider, or if such interest could be served by another practice that has a less discriminatory effect. Discriminatory effects liability is determined through a three-step burden-shifting test requiring a fact-specific analysis. First, the plaintiff or HUD must show that the challenged policy or practice has a discriminatory effect on members of a protected class. If this showing is made, the burden shifts to the housing provider to prove that the policy serves a substantial, legitimate, nondiscriminatory interest of the provider. If the provider meets this burden, the plaintiff or HUD must show that the provider s interest could be served by another policy or practice with a less discriminatory effect. In short, while the ability to communicate with applicants and tenants in a multifamily development is essential, requiring that applicants and tenants be proficient in English is unrelated to this requirement. Communication with non-English speakers may be accomplished through interpreters (these may be professional or family members/friends) or bi-lingual staff. No owner or management company should have a policy requiring that applicants or tenants be able to speak English.

Reminder of Federal Disaster Rules Relating to Section 42

With all the natural disasters that have occurred recently (Harvey, Irma, Maria), it is worthwhile to review IRS guidance relative to Low-Income Housing Tax Credit properties located in affected areas.   Disaster Relief Rules   Revenue Procedure 2014-49   This IRS Revenue Procedure provides temporary relief from certain requirements of 42 of the Internal Revenue Code (the LIHTC Program) for Agencies and owners if certain areas have been impacted by a major disaster. It also provides emergency housing relief for individuals who are displaced by a Major Disaster from their principal residences in certain Major Disaster Areas.   This procedure made some substantive changes to Revenue Procedure 2007-54, which was the major IRS guidance relative to tax credit properties and disaster areas prior to 2014-49. Key changes are (1) changes the reasonable restoration period for recapture relief and the tolling period for severely damaged, destroyed, or uninhabitable buildings in the first year of the credit period; (2) in determining qualified basis, uses the building s qualified basis at the end of the taxable year immediately preceding the first day of the incident period as determined by FEMA, rather than at the end of the taxable year preceding the President s Major Disaster declaration; (3) incorporates a temporary suspension of certain income limitations for Displaced individuals; (4) eliminates the need for self-certification of income eligibility; (5) permits an Agency to allow an owner within its jurisdiction to provide emergency housing relief to Displaced Individuals from other jurisdictions; (6) describes the consequences of providing emergency housing relief in the first year of the credit period and after the first year of the credit period; and (7) modifies the safe harbor relating to the amount of credit allowable to a restored building to provide relief in circumstances where the restoration cost is less than the eligible basis cost.   The procedure applies when the President has declared a Major Disaster. It applies to Displaced Individuals and to all 42 buildings, including those financed by Tax-Exempt Bonds. It also applies to all Agencies and owners both inside and outside States containing a Major Disaster Area.   Relief for Carryover Allocations   If an owner has a carryover allocation of credits for a building in a Major Disaster Area and the incident period for the Major Disaster began prior to the deadline for placing the building in service, the Agency may grant the owner an extension. If the Agency grants an extension (details of this process are explained below), the IRS will treat the owner as having satisfied the 10 percent of basis requirement of 42(h)(1)(E)(ii) if the owner meets the 10 percent requirement no later than the expiration of the Agency extension.   If the Major Disaster occurs on or after the date of the carryover allocation, the Agency may grant the owner an extension relative to the placed in service date for the building. In this case, the IRS will treat the owner as having satisfied the placed in service requirement of 42 if the owner places the building in service no later than the expiration of the extension.   If either the 10 percent requirement or placed in service requirement is not met by the end of the extension period, the credit will be returned to the Agency.   Procedure to Obtain Carryover Allocation Relief   Owners may not receive relief from Carryover Allocation rules unless the Agency that provided the allocation grants the relief.   Agencies may make the determination on an individual Project basis or determine that all owners or a particular group of owners in the Major Disaster Area need the relief provided by the revenue procedure. The extension may not be for more than six months after the date the owner would otherwise be required to meet the 10% of total development cost requirement. The extension may not extend beyond December 31 of the year following the end of the two-year period for placing a project in service, but can be for a shorter time period.   Recapture Relief   Generally, if, after the first year of the credit period, a building s qualified basis is less than the qualified basis at the end of the prior tax year, credits for the applicable tax year will be reduced and recapture will result for prior tax years.   If a building s qualified basis is reduced due to a casualty loss, a building is not subject to recapture if restored within a reasonable period of time. The HFA will determine what is reasonable in the case of a Major Disaster, but the extension may not extend beyond the end of the 25th month following the close of the month of the Major Disaster declaration. For example, if a major disaster is declared in September 2017, the deadline for restoration of qualified basis may extend no longer than October 2019.   In these cases, the qualified basis of the building allowable during the restoration period will be the building s qualified basis at the end of the taxable year immediately preceding the first day of the incident period for the Major Disaster.   If the building is not restored within the reasonable restoration period determined by the HFA, the credit amount allowable will be based on the building s qualified basis at the end of each year of the credit period. The HFA must report the failure to restore on IRS Form 8823.     Compliance Monitoring Relief   Agencies may extend the compliance monitoring due date for up to one year after a building has been restored and placed back in service. E.g., HFA compliance monitoring due in 2017, but building is down due to a disaster in a federally declared disaster area. Building is restored and placed back in service back in service May 1, 2018. State review will be due no later than May 1, 2019. However, if the State discovers that the building is out of compliance due to a Major Disaster, the Agency must report the noncompliance on Form 8823 and describe how the disaster contributed to the noncompliance.     Buildings in the First Year of the Credit Period   If a building is severely damaged or destroyed in a Major Disaster Area during the first year of the credit period, Agencies have the discretion to either (1) treat the allocation as a returned credit to the Agency, or (2) toll the beginning of the first year of the credit period. The tolling period shall not extend beyond the end of the 25th month following the close of the month of the Major Disaster declaration. Owners may not claim any credit during the restoration period. Agencies will report this relief as part of the 8610 process.   Amount of Credit Allowable to a Restored Building   Owners will receive no additional credits for the costs associated with restoring a building s qualified basis. If money is spent on rehab and not on restoration, additional credits may be awarded.   Emergency Housing Relief   LIHTC projects may be used to house individuals displaced due to a Disaster Area declaration, but only with State Agency approval. This approval must specify the date on which the Temporary Housing Period for the Project ends. This period cannot exceed 12 months from the end of the month in which the President declared the Major Disaster.   Protection of Existing Tenants: No existing tenant whose income is, or is treated as, at or below the 42 income limit may have occupancy terminated solely to provide emergency housing for a Displaced Individual. Rent Restrictions: Gross rents for low-income units that house displaced individuals may not exceed the maximum gross rent that would apply under 42.   Implementation of Emergency Housing Relief   The IRS Revenue Procedure authorizes, but does not require, provision of emergency housing relief to displaced persons. Owners are not required to provide such relief, nor are agencies required to permit it. If an owner chooses to provide relief, such relief may be provided for less than the full Temporary Housing Period. If a displaced individual qualifies as low-income under 42, the owner may rent to the individual as a low-income resident or provide temporary housing relief based on the guidance of the Revenue Procedure. Units occupied by displaced individuals will not be considered "transient" units for purposes of 42. Occupancy by displaced individuals may be disregarded for purposes of the available unit rule. However, the rule still applies to buildings where residents qualified under 42 exceed 140% of the applicable income limit. If a project is in the first year of the credit period and a unit is occupied by a displaced individual, the units is treated as low-income for (1) determination of qualified basis; and (2) meeting the elected minimum set-aside test.   Treatment of Units After the First Year of the Credit Period   If a Displaced Individual begins occupancy of a unit during the Temporary Housing Period, but after the first year of the credit period, the unit will retain the status it had immediately before that occupancy. Therefore, if the unit is a low-income unit, a market-rate unit, or a unit never previously occupied, it retains that status while occupied by a displaced individual, regardless of the income of the displaced individual.   Treatment of a Unit Vacated by a Displaced Individual   If a displaced individual vacates a unit before the end of the Temporary Housing Period, the unit retains the status it had prior to occupancy by the displaced individual, even if the next tenant does not occupy the unit until after the end of the Temporary Housing Period. Income Qualifications when Temporary Housing Period Ends   If a displaced person continues to occupy a unit in a project at the end of the temporary housing period, the status of the unit will be re-evaluated as though the individual moved into the project on the day immediately following the end of the temporary housing period. In other words, if the displaced person is not a qualified low-income tenant, the unit will be considered a market unit on the day after the end of the temporary housing period. If a project falls below the required minimum set-aside as a result of this determination, a 60-day period is allowed for correction.   Emergency Housing Relief - Recordkeeping   For each displaced individual, the following information must be kept in a statement signed by the displaced individual under penalty of perjury: The name of the displaced individual; The address of the principal residence at the time of the major disaster of the displaced individual; The displaced individual s social security number; and A statement that he or she was displaced from his or her principal residence as a result of a major disaster and that his or her principal residence was located in a city, county or other local jurisdiction that is covered by the President s declaration of a major disaster and that is designated as eligible for Individual Assistance by FEMA due to the major disaster.   The owner must maintain a record of the Agency s approval of the Project s use for displaced individuals and of the approved Temporary Housing Period. The owner must report to the Agency at the end of the Temporary Housing Period a list of the names of the displaced individuals and the dates those individuals began occupancy. The owner must also provide the dates the individuals ceased occupancy and, if applicable, the date each unit occupied by a displaced individual became occupied by a subsequent tenant.        

Tax Reform Overview - September 27, 2017

On September 27, 2017, the Trump Administration, the House Committee on Ways and Means, and the Senate Finance Committee released "Unified Framework for Fixing Our Broken Tax Code." This nine-page proposal put out by the "big-six" represents the first significant overview of tax reform as it will be proposed by the President and the Congressional tax writing committees. The framework is clearly tilted to favor the wealthy and corporations.   The goals outlined in the publication include: Tax relief for middle-class families; Simplified tax-filing for most Americans; Tax relief for businesses, especially small businesses; Ending tax incentives that send jobs, capital, and tax revenue overseas; and Broaden the tax base and increase fairness by closing special interest tax breaks and loopholes.   The process of developing specific legislation by the Ways and Means and Finance committees will now begin, and will include a series of hearings and (hopefully) bipartisan participation.   Following is an outline of goals for the legislation (and some of my own observations):   Tax Relief & Simplification for American Families   Simplify the tax code and provide tax relief by roughly doubling the standard deduction to: $24,000 for married taxpayers filing jointly, and $12,000 for single filers. This change is designed to eliminate taxes on the first $24,000 of income earned by a married couple and $12,000 earned by a single individual. Under current law, taxable income is subject to seven tax brackets. This proposal reduces the number to three brackets of 12%, 25%, and 35%. The concept is that families in the current 10% bracket will benefit from the larger standard deduction, a larger child tax credit and additional relief to be developed during the committee process. An additional top rate may be added to avoid shifting the tax-burden from high-income to lower- and middle-income taxpayers. The current top rate is 39.6%. Enhanced Child Tax Credit and Middle Class Tax Relief: Personal exemptions for dependents would be repealed but the Child Tax Credit would be increased. The current law allows the first $1,000 of the credit to be refundable and that provision would be retained. Increase the income levels at which the Child Tax Credit begins to phase out. Non-refundable credit of $500 for non-child dependents to help offset the cost of caring for other dependents. Individual Alternative Minimum Tax [AMT]: No details were provided on this, but the stated goal is to simplify the tax code by repealing the existing individual AMT, which requires taxpayers to do their taxes twice. Itemized Deductions: Most itemized deductions will be eliminated, but the home mortgage interest and charitable deductions will be retained. Among the deductions that may be eliminated are the deductions for state and local taxes (most of which are present in "blue" states. Work, Education, and Retirement: No details are provided, but the stated goal is to retain tax benefits that encourage work, higher education, and retirement security. Other Provisions Affecting Individuals: Again, no details - just a statement of intent to simplify the tax code by repealing many exemptions, deductions, and credits for individuals. Death and Generation-Skipping Transfer Taxes: These taxes would be repealed.     Competitiveness & Growth for All Job Creators   Tax Rate Structure for Small Businesses Limits the maximum tax rate applied to the business income of small and family-owned businesses conducted as sole proprietorships, partnerships and S Corporations to 25%. About 95% of businesses in the US are structured as pass-throughs (e.g., S Corporations) and they generate a majority of the government s corporate tax revenue. Adopt measures to prevent the recharacterization of personal income into business income to prevent wealthy individuals from avoiding the top personal tax rate. Tax Rate for Corporations Reduce the corporate tax rate to 20%. Expensing of Capital Investments Permit businesses to immediately write off ("expense") the cost of new investments in depreciable assets other than structures made after September 27, 2017, for at least five years. Interest Expense The deduction for net interest expense incurred by C Corporations will be partially limited. Other Business Deductions & Credits Many business credits will be repealed, but business credits in two areas where tax incentives have proven to be effective will remain: Research & Development; and The Low-Income Housing Tax Credit. Tax Rules Affecting Specific Industries No specifics given - just a desire to improve the current tax code.   The American Model for Global Competitiveness   Territorial Taxation of Global American Companies End incentives to keep foreign profits offshore by exempting them when they are brought back to the United States. Stop Corporations from Shipping Jobs and Capital Overseas Wills set rules to protect the U.S. tax base by taxing at a reduced rate and on a global basis the foreign profits of U.S. multinational corporations.   The cost of this framework is unknown, but estimates range from $2 trillion to more than $5 trillion over the next ten years. The devil is in the details and how this plan will be paid for will determine how quickly it moves through Congress (or if it moves through Congress). The key issue as it stands right now is that the government simply does not have enough money to pay for the plan. Ironically, in order for the Senate to avoid a filibuster (and reliance on the democrats to pass a plan), taxes may actually have to be raised - by as much as $3 trillion over the next decade in order to ensure that the bill is revenue neutral.   The term "revenue neutral" means that the overall legislation will not change the total revenues collected by the Federal government. For example, if tax rates are reduced, as proposed, that reduction has to be paid for by raising revenue in other ways, such as scaling back tax preferences. As noted above, the initial framework scales back a number of preferences, but - what are the chances that these preferences will actually be passed? This is only part of what will make a final tax reform bill so difficult. Here are a few minefields the tax-writing committees will have to navigate:   Scrapping the deduction for what businesses spend on interest is going to be a tough sell - this is a treasured benefit for industries that rely on debt financing - i.e., big banks, private equity firms, electric utilities, real estate developers, farms, and small businesses. Doing away with deductions for state and local taxes will be resisted by House Republicans from high-tax states such as New York and New Jersey. Major objections are already being heard from the real estate industry. While the plan specifically calls for preserving the mortgage interest deduction, a proposal to double the standard deduction will make taxpayers less likely to itemize their tax returns and claim the mortgage deduction. Therefore, one of the main financial advantages to homeownership will be diminished.   While all of us in the affordable housing industry applaud the fact that the Low-Income Housing Tax Credit is included in this initial plan, there is no guarantee it will be there at the end of the process. We will are going to have to be diligent and continue to make the case for the program, or face the possibility that it will be sacrificed to retain the other, less socially beneficial, tax benefits.    

Notice of Solicitation for Multifamily Preservation and Revitilization (MPR) Demonstration Program for Section 514, 515, and 516 Rural Properties

On September 5, 2017, the Rural Housing Service published a Notice of Solicitation for Multifamily Preservation and Revitalization (MPR) Demonstration Program for Section 514, 515, and 516 Rural Properties in the Federal Register.   This notice announces the timeframes to submit preapplications to participate in a demonstration program to preserve and revitalize existing Multi-Family Housing (MFH) projects currently financed under Section 514, Section 515, and Section 516 of the Housing Act of 1949. These are the Section 515 Rural Rental Housing Program and Section 514/516 Off-Farm Labor housing programs. The goal for projects participating in this program is to extend their affordable use without displacing tenants because of increased rents.   This notice does not provide any funding for additional units (with one exception as noted below).   Dates   Pre-applicants selected to submit final applications will be funded to the extent an appropriation act provides sufficient funding. Pre-application submission deadlines are: For pre-applications requesting multiple MPR funding tools (including debt deferral of eligible Section 514 or 515 loans) complete pre-applications are due no later than 5:00 PM Eastern Time December 1, 2017; For any MPR applicants requesting debt deferral only for eligible Section 514 or 515 loans, pre-applications are due no later than 5:00 PM September 28, 2018, and may be submitted on an on going basis.   MPR pre-applications will only be accepted electronically.   Program Description   MPR funds cannot be used to build community rooms, add additional parking areas, playgrounds, or laundry facilities. The funds may be used to repair or renovate existing project items identified in a Capital Needs Assessment (CNA) and to satisfy accessibility transition and fair housing requirements.   If a market study or another acceptable information source demonstrates a need for additional affordable rental housing, MPR funds may be used to add new units, and/or reconfigure the present units, but only within the existing footprint of a project s current or previously resident-occupied structure(s) (e.g., converting the non-residential portion of a mixed-use space into residential units). MPR funds may also be used to meet the projects 5% fully accessible requirement.   Among the tools available under the MPR program are: Debt payment deferral for up to 20-years; Grants (for non-profit applicants only); Zero percent loans; Soft-second loans; and Transfers/Subordination/Consolidations   Award Information   Pre-applications selected under this Notice that become an Agency approved application may be funded with current or future fiscal year funds subject to the availability of Congressional appropriations. Interested parties should note that the Agency has unfunded applications carried over from prior Notices that will receive priority consideration for funding approval.   The Agency anticipates it may not have sufficient funding under this Notice to fund every approved application.   Contact Information   Owners interested in submitting a pre-application under this demonstration program may contact either of the following for additional information: Dean Greenwalt, greenwalt@wdc.usda.gov, [314]457-5933; or Abby Boggs, boggs@wdc.usda.gov, [615]783-1382.

Washer and Dryer Fees for Voucher Holders

Owners of properties that accept applicants who use Housing Choice Vouchers (HCV) need to carefully review the Housing Assistance Payments (HAP) Contract and Voucher Lease Addendum for language relating to who must pay the cost of "utilities and appliances." A recent court case (U. S. v. Wasatch Advantage Group, July 2017) indicated that a washer or dryer may be considered an "appliance," and unless payment for washers and dryers is specifically excluded in the HAP contract and lease addendum, owners may not be able to charge a fee for their use.   Section 8 of Part A of the HAP Contract for vouchers states that the owner shall pay for all utilities and appliances provided by the owner. Part B, 5.b states that the lease must specify what appliances are to be provided or paid by the owner or the tenant, and that the lease must be consistent with the HAP contract.   Part C, 5.e provides that the owner may not charge or accept, from the family or any other source, any payment for rent of the unit in addition to the rent to the owner. Rent to the owner includes all housing services, maintenance, utilities, and appliances to be provided and paid by the owner in accordance with the lease.   When units contain washer/dryer hookups, but not the actual appliances, many owners offer tenants the option of providing their own washer and dryer or renting from the owner. This is common in the apartment industry, and until now, the charging of a fee for rental of the washer and dryer has not been considered an issue. While this case is certainly not determinative with regard to whether an owner may charge for washers and dryers in these cases, it does indicate that owners should be cautious when it comes to offering this service to voucher holders. Certainly if the option is given to non-voucher users it should be offered to residents with vouchers. But, owners should ensure that the HAP Contract and Voucher Lease Addendum specifically state that the washer and dryer are not provided by the owner and that the tenant has the option of providing their owner washer/dryer, not having a washer/dryer, or renting one from the owner.