The 2024 Edition of A. J. Johnson’s “The Professional Property Manager’s Guide to the Low-Income Housing Tax Credit” has been released, offering a vital resource for professionals managing LIHTC properties. Originally a concise 19-page overview of the LIHTC program in 1987, the guide has evolved into a comprehensive 163-page manual addressing the current complexities of LIHTC property management.
Evolution of the LIHTC Program
The last update in 2019 reflected a stable LIHTC program, with its effectiveness in generating affordable housing well-recognized. As of April 2024, the program remains popular and essential in the affordable housing sector, but the integrity of the program must be maintained through careful management and compliance.
Since 2019, the LIHTC program has undergone several reforms to enhance its effectiveness in addressing affordable housing challenges. These changes include:
- Increased Allocation Authority: This adjustment stimulates more affordable housing production.
- Income Averaging: This policy allows for a broader range of income levels to be served by LIHTC properties.
- 4% Fixed Rate for Bond-Financed Projects: This reform aims to attract more private investment by stabilizing financial expectations.
In response to the COVID-19 pandemic, temporary relief measures were introduced to ease compliance requirements and extend deadlines, providing essential flexibility during the crisis.
Impact of Recent Regulatory Changes
The 2024 Guide addresses the 2023 publication of the final Housing Opportunities Through Modernization Act (HOTMA) rule by HUD, which includes several changes impacting the LIHTC program. Additionally, HUD’s implementation of the National Standards for the Physical Inspection of Real Estate (NSPIRE) has altered the inspection approach for many Housing Credit Agencies. However, the full impact on LIHTC properties is still being assessed.
Compliance and Monitoring
State agency compliance differences persist, but the industry has largely aligned on the necessary operational procedures to minimize credit risk. The IRS Audit Guide has clarified IRS expectations for LIHTC project operations, making compliance a more accessible target for property managers. The 1990 Amendments to Section 42 of the Internal Revenue Code mandated compliance monitoring for all properties utilizing the credit, effective from January 1, 1992. State Housing Finance Agencies are responsible for this monitoring, with specific requirements outlined in each State’s Allocation Plan.
Since January 1, 2001, State Housing Finance Agencies must review all new buildings and 20% of low-income units and resident files by the end of the second year after the final building in a project is placed in service. Following this initial review, HFAs continue to inspect a percentage of units and files, generally 20%, every three years.
A Resource for Practitioners
The 2024 Edition of the guide is designed to assist property managers and other professionals overseeing tax credit properties in navigating the LIHTC program. While it does not delve into the highly technical or legal aspects of the tax credit, it offers sufficient detail to help operators successfully manage LIHTC properties in compliance with both state and federal requirements. For specific legal or tax advice, readers are encouraged to consult with professionals in those fields.
In summary, this guide is an essential tool for those managing LIHTC properties, helping them understand and meet the program’s requirements while maintaining the integrity and success of the projects under their care.
To purchase this invaluable resource, go to the link lihtc.guide. As always, if you have any questions about the content of The Guide, contact A. J. directly at aj.ajjcs@gmail.com