Section 42 Procedural Review

Section 42 procedural reviews examine all aspects of tax credit operations on a property, and will cover the following areas:

  • Confirmation of minimum set aside
  • Examination of in service date relative to lease up deadlines
  • Review of special set asides
  • Examine Extended Use Agreement and ensure that requirements of the Agreement are met
  • If multiple financing programs are used, ensure that site complies with requirements of those programs
  • If there are mixed income buildings, analyze the applicable fraction requirements of the buildings
  • Examine Deep Rent Skewing requirements (if applicable)
  • Review the property for compliance with the accessibility and adaptability requirements of the Fair Housing Act of 1988 (if applicable)
  • Determine if non profit partner is materially participating (if applicable)
  • Examine issues relating to model units, employee units, and courtesy officer units
  • Review any optional fees charged to residents for appropriateness under Section 42
  • Determine if rent and utility allowance levels are appropriate
  • Ensure that correct income limits are being used on site
  • Analyze site policies relative to rental to Section 8 recipients
  • Analyze methodology for tracking units under the Next Available Unit rule
  • Determine how original resident files are being secured and whether copies of such files have been made for off site storage
  • Review of 15 resident files to determine if procedures are adequate to ensure that tenant qualification and documentation requirements are being met