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A. J. Johnson

A. J. Johnson

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Program Relief for Flood & Tornado Victims

April 1, 2011

State Housing Finance Agencies in Alabama, Tennessee, Georgia, and Mississippi are relying on IRS Revenue Procedure 2007-54 to provide relief for owners and tenants affected by recent flooding and tornados. The Procedure provides temporary relief from carryover allocation rules, recapture,…

Nations Top Four Apartment Owners are Tax Credit Firms

April 1, 2011

The National Multi Housing (NMHC) as released its annual list of the nation’s 50 largest apartment owners for 2011. The top four on the list are all deeply involved in the Low-Income Housing Tax Credit Program, and are as follows:…

Virtually All HFAs Now Providing Incentives for Preservation Projects

April 1, 2011

According to a National Housing Trust Survey of state qualified allocation plans (QAPs), almost all State Agencies are now awarding points, providing set-asides, and seeking preferences for preservation in the development of tax credit projects. 16 agencies have included preservation…

IRS Releases Updated 8823 Guide

April 1, 2011

The IRS has released the third version of the 8823 Guide, designed to assist State Agencies and taxpayers in understanding IRS requirements relative to compliance with the Section 42 Low-Income Housing Tax Credit Program. Changes were not as sweeping as…

Affordable Housing Investors Council Issues New Underwriting Guidelines

April 1, 2011

The Affordable Housing Investors Council (AHIC) has revised their guidelines for the underwriting of low-income housing tax credit projects, calling for increased scrutiny of development and management teams. The revised recommendations include the following: • Investors should closely investigate developer…

President Proposes Changes to Section 42

March 1, 2011

The Obama Administrations fiscal 2012 budget makes changes in the tax provisions that govern the Low-Income Housing Tax Credit Program. One change would permit a 30 percent basis increase for bond-financed preservation projects that were originally financed with federal funds,…

Use Facts to Fight NIMBYism

March 1, 2011

Developers of affordable housing often face an uphill battle when trying to convince local planning commissions, city councils and community residents that an affordable housing complex will actually be good for a community. A recent report from the National Association…

Connecticut Court Case Good News for Affordable Housing Assessments

March 1, 2011

The Connecticut Superior Court has ruled that low and moderate income housing must be assessed using an income capitalization approach to value, and not a cost approach. This is good news for owners challenging high assessments of affordable properties, even…

New Cell Phone Application Offers Translation Services

March 1, 2011

Codetalker (www.codetalkerinc.com) is a new cell phone application that connects users to a live interpreter for a three-way conversation. Interpreter services for more than 175 languages are available, and the service also offers 24-hour turnaround for translation of documents. This…

Administration Proposes Cutting 538 Funding

March 1, 2011

The Obama Administration’s fiscal 2012 budget includes $95.2 million for Section 515 direct rental housing loans, but no money for Section 538 guaranteed multifamily loans.

Rural Housing Service Issues Final Regs on Continuous Section 538 Guarantee

March 1, 2011

On January 3, 2011, the Rural Housing Service issued final regulations for the Section 538 guaranteed multifamily housing loan program that provide for a single, continuous guarantee for construction and permanent financing. The regulation went into effect on February 2,…

Reminder Regarding DUNS Number

March 1, 2011

Last month, I reviewed the HUD requirement that all owners of HUD assisted properties obtain a Dun and Bradstreet Number no later than March 5, 2011. Failure to do so could result in a loss of subsidy. If you are…

HUD Establishes Rules for Conversion of Efficiencies to One-Bedroom Units

March 1, 2011

HUD Notice H-2011-03, issued on February 1, 2011, outlines procedures for converting efficiency units to one-bedroom units in assisted projects when the demand for efficiencies is weak and the conversion will not increase subsidy costs. While the Notice addresses only…

HUD Issues Notice on Handling the Death of a Sole Household Member

March 1, 2011

Notice PIH 2010-50 (HA), issued January 1, 2011, clarifies the procedures PHAs must follow to avoid housing subsidy overpayments when the sole household member dies, including the treatment of units with live-in-aides. If the only remaining household member is a…

Use Project Binder to Organize for HUD MOR

March 1, 2011

When HUD or Contract Administrators conduct Management & Occupancy Reviews (“MOR”), they will ask for a slew of documents. Failure to have the documents will result in MOR findings that will lower the property’s score. It is a good idea…

Major Cuts – Some Increases in Administration’s 2012 Budget Proposal for HUD

March 1, 2011

The fiscal year 2012 HUD budget proposal released by the Obama Administration increases funding for Section 8 and homeless assistance, but cuts funding for CDBG, HOME, Section 202, and Section 811 housing. HUD is also proposing some key operational changes…

Avoid Lease Addendums Regarding Second Hand Smoke

March 1, 2011

In Upper East Lease Assoc, LLC v. Cannon, January 2011, an owner sued a resident for unpaid rent. The resident claimed that the owner had violated the warranty of habitability by allowing secondhand smoke to infiltrate from a downstairs neighbor.…

Fair Housing v. Security; Be Careful When Deciding Whether to Show an Apartment

March 1, 2011

It is a good management practice to avoid showing apartments when a manager feels threatened in any way. I always advise managers not to show units when they fear being alone with a prospect. However, fair housing law requires the…

TCAP Grants Considered Income By IRS

March 1, 2011

In Chief Counsel Advisory (CCA) 201106008, issued December 3, 2010, the Office of Chief Counsel of the IRS stated that because the American Recovery and Reinvestment Act of 2009 (the Recovery Act) did not specifically exclude Tax Credit Assistance Program…

State Agencies Getting Tough on Developers

March 1, 2011

Agencies in a number of states have tightened the requirements for developers with regard to being eligible to apply for tax credits. Iowa, Texas, and Florida have all added requirements that expand the ways applicants may be deemed ineligible for…

State Allocating Agency Priorities for 2011

March 1, 2011

A review of the Qualified Allocation Plans (QAPs) of the State Allocating Agencies indicates some new priorities and directions for a number of states with regard to the Low-Income Housing Tax Credit Program. For example, the Massachusetts Department of Housing…

HUD/IRS Agree on Protocols for Physical Inspections

March 1, 2011

The Internal Revenue Service and HUD have reached a preliminary agreement that will allow HUD REAC inspections to satisfy IRS physical inspection requirements for tax credit properties with project-based Section 8 assistance. Also, HUD will be able to rely on…

Lack of Habitability – Impact on the Applicable Fraction

March 1, 2011

The LIHTC program requires that in order for credits to be claimed, low-income projects and units must be suitable for occupancy under regulations prescribed by the Secretary of the Treasury. Units that are not suitable for occupancy on the last…

Red Flags Rule

February 1, 2011

The Federal Trade Commission (FTC) has issued a new rule that goes into effect on January 1, 2011, called the “Red Flags Rule.” This rule requires certain businesses to develop written plans to fight identify theft. The Red Flags Rule…

RD Issues Unnumbered Letter Regarding Non-Smoking Properties

February 1, 2011

On December 29, 2010, the Rural Development Service issued an Unnumbered Letter outlining the policies that owners of RD assisted properties may put into place if they wish to ban smoking at RD assisted multifamily properties. Owners may ban smoking…

Rural Development Focusing on Energy Efficiency for New Projects

February 1, 2011

In FY 2010, the Rural Housing Service funded 31 multifamily housing projects; in each case, energy efficiency was made a priority…

HUD Issues Violence Against Women Act (VAWA) Rule

February 1, 2011

In the October 27, 2010 Federal Register, HUD published the final rule implementing the Violence Against Women Act (VAWA)…

Pending Legislation Would Reform Section 202 & 811 Programs

February 1, 2011

Congress has approved bills to reform the Section 202 and 811 supportive housing programs for the elderly…

Notice Requiring Owners with Project-Based Rental Assistance Contracts or Section 202 or 811 Project Rental Assistance Contracts to Obtain Dun and Bradstreet Numbering System (DUNS) Numbers and to Register in the Central Contractor Registration (CCR)

February 1, 2011

HUD issued notice H 2011-01 on January 5, 2011, providing the regulatory reporting requirements and guidance for legal entities receiving federal assistance…

State Agencies Making Preservation a Priority

February 1, 2011

An examination of the proposed Qualified Allocation Plans (QAP’s) for 2011 makes clear that preservation of existing housing is becoming more of a priority for the tax credit program…

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