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Allocations Under the Nonprofit Set-Aside – IRS Requirements

September 28, 2015

IRC Section 42(h)(5) requires that a portion of each states annual credit ceiling be set aside for allocation to projects involving qualified nonprofit organizations. Specifically, the Code requires that not more than 90% of the state housing credit ceiling for…

Children For Whom Custody is Being Sought – To Count or Not to Count

September 21, 2015

Children for Whom Custody is Being Obtained – To Count or Not to Count When determining income eligibility for Section 8 or Low-Income Housing Tax Credit (LIHTC) properties, HUD Section 8 rules must be followed. The basic HUD guidance…

HUD Clarifications Regarding Completion of Utility Allowances

September 19, 2015

I sent a memo to clients on June 29, 2015, regarding HUD Notice H 2015-04, which was published by HUD on June 22, 2015. This Notice outlined revised HUD requirements relative to the Methodology for Completing a Multifamily Housing Utility…

Definition of a Parent for the Section 42 Student Rule

September 16, 2015

Section 42 (i) (3) (D) states that certain students do not disqualify a unit from being low-income for LIHTC purposes. Five exceptions are outlined in the Code, one of which states “A unit shall not fail to be treated as…

HUD Clarification on HOME Rental Requirements

September 10, 2015

HUD recently provided guidance on components of the HOME program that have raised questions. Following are the clarifications that apply to the use of HOME funds with multifamily housing. HOME funds cannot be used in public housing units that receive…

Determining the Cash Value of and Income from Annuities

September 8, 2015

Determining the Cash Value of and Income from Annuities There is some confusion among managers of affordable rental housing regarding how to determine the value of and income from annuities. Part of the confusion is the result of a…

Claiming Credits without an IRS Form 8609 – Guidance from the IRS Audit Guide

September 6, 2015

Claiming Credits without an IRS Form 8609 – Guidance from the Audit Guide IRC §42(l)(1) requires that taxpayers complete a certification with respect to the first year of the credit period. This certification is made by completing Part II…

Assistance Animals – A Reminder on What is Required

August 5, 2015

On July 15, 2015, HUD charged the owners and manager of Viking Villas, a 36-unit apartment complex in Sioux Falls, SD, with a violation of the Fair Housing Act for refusing to grant a reasonable accommodation to a disabled resident…

Rural Housing Service Accepting Applications for Multifamily Preservation and Revitilization (MPR)

August 3, 2015

On August 3, 2015, the Rural Housing Service published a Notice in the Federal Register announcing the timeframe to submit applications to participate in a demonstration program to preserve and revitalize existing Rural Rental Housing (RRH) projects under Section 514,…

RAD – Revised Program Notice PIH-2012-32, REV-2

July 6, 2015

On June 26, 2015, HUD published a Notice in the Federal Register revising some of the rules of the Rental Assistance Demonstration (RAD) Program. HUD’s original notice on the program was published on June 26, 2012. The RAD program provides…

HUD Notice H-2015-04, Methodology for Completing a Multifamily Housing Utillity Allowance

June 29, 2015

On June 22, 2015, HUD issued Notice H-2015-04, Methodology for Completing a Multifamily Housing Utility Analysis. The Notice provides instructions to owners and management agents for completing the utility allowance required at the time of the annual or special adjustment…

Revision to RD Section 538 Guaranteed Loan Program Replacement Reserve Requirements

June 18, 2015

The Rural Housing Service published a Notice in the Federal Register on June 18, 2015, amending its regulation to change the requirements of the reserve account for direct Multifamily Housing (MFH) loans. The purpose of the Notice is to address…

Nonprofit Material Participation Requirements

June 6, 2015

Section 42 (h) (5) of the Internal Revenue Code requires that Housing Finance Agencies set aside at least ten percent of their annual allocation for use by non-profit entities. This “non-profit pool” is available only to Qualified Nonprofit Organizations and…

Good Cause Evictions – New IRS Guidance

May 26, 2015

The IRS issued a Chief Counsel Advice (CCA) memorandum on March 26, 2015 on the subject of Noncompliance Resulting from Conflicting Program Requirements in the Low-Income Housing Tax Credit program. The memorandum was issued in order to change the advice…

Familial Status Case – Issue of Separate Sex and Bedrooms, April 2015

May 25, 2015

On April 30, 2015, HUD entered into a Conciliation Agreement with Piilani Gardens, LLC regarding alleged familial status discrimination at Piilani Gardens Apartments in Kihei, Hawaii. Piilani Gardens is a family project, but two of the 18 buildings in…

HUD Notice CPD-15-02, Appropriate Placement for Transgender Persons in Single Sex Emergency Shelters and Other Facilities – February 20, 2015

May 17, 2015

HUD published Notice CPD-15-02 on February 20, 2015, providing further guidance on the placement of transgender persons in single-sex emergency shelters and other facilities. This guidance is provided in order to clarify the final rule published by HUD on February…

Verification of Social Security and Supplemental Security (SSI) Payments

April 11, 2015

Verification of Social Security and Supplemental Security Income (SSI) Payments Managers of affordable housing properties (e.g., Section 8, LIHTC, Section 515, etc.) often struggle with the verification of income from Social Security (SS) or SSI. While verification of such…

HUD to Publish Proposed VAWA Regulation

March 30, 2015

HUD Secretary Julian Castro announced on March 25, 2015 that HUD’s proposed regulation implementing the Violence Against Women Act of 2013 (VAWA 2013) will shortly be published in the Federal Register. The rule will implement the VAWA 2013, which expands…

Employee Unit Rent

March 22, 2015

As I indicated in a memo I sent to clients on November 7, 2014, the IRS will not consider the charging of rent or utilities for employee or security officer units to be an audit issue. This position is stated…

Davis-Bacon Requirements for Project Based Vouchers

March 14, 2015

HUD issued a Notice in the March 9, 2015 Federal Register providing further guidance on when Davis-Bacon wage requirements may apply to existing housing developments. This guidance relates to the final rule published by HUD on June 25, 2014 amending…

Update of Housing Trust Fund – February 18, 2015

February 18, 2015

As I noted in an earlier article, HUD has published interim regulations regarding how the Housing Trust Fund (HTF) program will be administered when funds are made available (hopefully in 2016). A final rule is anticipated before Summer 2015. Developers…

HUD Publishes 2015 Annual Adjustment Factors for Section 8 Rents

February 7, 2015

On February 9, 2015, HUD published a Notice in the Federal Register listing the Section 8 Housing Assistance Payments Program Annual Adjustment Factors (AAF) for fiscal year 2015. The adjustments may be made on the anniversary of assistance contracts. These…

E-Book on LIHTC Compliance Now Available

January 22, 2015

As you well know, the federal low-income housing tax credit program is complicated. Staying in compliance with all of the program’s rules – and successfully interpreting the gray areas – is essential for all of the players involved in projects:…

Documents to Retain for LIHTC Projects

January 16, 2015

Documents to Retain for Low-Income Housing Tax Credit Projects In September 2014, the IRS published the Audit Guide for Low-Income Housing Tax Credit Projects. This guide is intended to assist IRS agents during an examination of a Section 42…

Marijuana in Federally Assisted Projects – December 29, 2014 HUD Memo

January 7, 2015

On December 29, 2014, HUD sent a memorandum to all HUD offices regarding the use of Marijuana in multifamily assisted properties. The purpose of the memo was to clarify HUD’s position regarding renting to applicants who use marijuana and the…

Emergency Call Systems – HUD Guidance, October 31, 2014

December 29, 2014

Many owners and managers of HUD assisted properties have reported inconsistent guidance from HUD with regard to the type of emergency call systems required for elderly multifamily projects. It has been reported that in some cases, HUD staff have instructed…

Importance of Regular Review of Company Handbooks & Policies

December 27, 2014

Many property management companies create operations and compliance handbooks and policies to assist staff in understanding the company’s operational procedures. Once completed, the handbooks and policies are rarely (if ever) reviewed and updated. A periodic audit of a company’s employment…

Medical Marijuana as a Reasonable Accommodation

December 15, 2014

Forest City Residential Management v. Beasley, December 2014. In one of the first major cases relating to whether the use of medically prescribed marijuana must be permitted as a reasonable accommodation, a Michigan district court has ruled that such…

Waiting List Administration; HUD Notice H 2014-16

December 13, 2014

HUD issued Notice H 2014-16 on November 28, 2014 to provide guidance on the administration of waiting lists for HUD multifamily housing properties. The Notice provides no new requirements, but does provide additional options for waiting list administration. Owners…

Obtaining Approval for Security Officers at LIHTC Projects

December 7, 2014

If a multifamily project with Low-Income Housing Tax Credits (LIHTC) is experiencing issues with crime or security or is located in a high crime area, owners may want to house a security or police officer in one of the low-income…

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