Presentation Transcript

1. Managing Eligibility in Blended Occupancy Projects Sheryl Putnam and Samantha Pratter Experience – Leadership - Collaboration
2. Learning Objectives Key program elements and requirements for the following programs: Low Income Housing Tax Credit (LIHTC) Project Based Rental Assistance (PBRA) Project Based Voucher (PBV) Public Housing (PH) HOME
3. Learning Objectives Similarities and differences of determining eligibility in combined funding projects: Citizenship requirements Social Security Number requirements Student rules Income limits Verification requirements Staff units in LIHTC units
4. Overview of Programs Program regulations sometimes conflict A general rule is that the most restrictive program wins!
5. Overview of Programs - LIHTC Provides the private market incentives for construction, rehab or acquisition of low-income rental housing Federal tax credits awarded to owners/developers by State Housing Finance Agencies (HFA) State HFAs perform ongoing compliance on behalf of IRS Noncompliance may result in recapture of credits by the IRS
6. Overview of Programs - LIHTC The federal minimum set-asides are minimums Federal minimum set-asides are 20/50 or 40/60 Owners may also choose to rent to lower-income households Known as deep rent skewing Indicated in regulatory documents
7. Overview of Programs - LIHTC Income limits Tenants in LIHTC units must meet specified income limits Generally either 50% or 60% LIHTC income limit, but may be lower depending on project
8. Overview of Programs - LIHTC Rent limits LIHTC units must be rent restricted throughout the project’s compliance period Rent includes the utility allowance and cannot exceed HUD’s published rent limits
9. Overview of Programs - PBRA Provided to either PHAs or private owners 20 to 40 year HAP Contract with HUD after completion of construction or rehab After the initial term of the HAP contract, owners can continue or “opt out”
10. Overview of Programs - PBRA Rent limits Contract rent is approved by HUD as listed on the HAP contract or amendment to HAP contract Must be comparable to unsubsidized rents
11. Overview of Programs - PBRA Income limits Either the low-income (80% of AMI) or very low-income (50% of AMI) Projects with HAP contracts on or after 10/1/81 must admit only very low-income (50% of AMI)
12. Overview of Programs - PBV Section 8 HCV project-based voucher Allows PHAs that administer tenant-based vouchers to attach up to 25% of voucher budget authority to specific units or projects PHA and owner enter into a HAP contract Minimum of one year, maximum of 15 years
13. Overview of Programs - PBV Rent limits Contract rent is established by PHA on HAP Contract
14. Overview of Programs - PBV Income limits Same as for Housing Choice Voucher (HCV) Program Generally 50% of AMI PHA establishes that participants are income-eligible
15. Overview of Programs - PH Created in 1937, public housing is owned by local housing authorities (PHA) PH receives operating subsidy (and capital grant) from HUD
16. Overview of Programs - PH Rents Tenant rent is the amount payable by family Families choose annually whether to pay income-based or flat rent If income-based, TTP minus utility allowance (if any) Flat rent is based on market value
17. Overview of Programs - PH Income limits For admission, family must have income at or below 80% of AMI Once a family is admitted, they’re no longer subject to the income limits
18. Overview of Programs - HOME HUD provides formula grants to states and participating jurisdictions (PJs) for eligible HOME activities Many different types of eligible HOME activities This session is focusing on HOME-assisted r rental housing eligible activity
19. Overview of Programs - HOME HOME projects must remain affordable for 5 – 20 years (affordability period) Depending on the type of HOME project
20. Overview of Programs - HOME Income limits Tenants in HOME-assisted units must meet specified income limits: Low-income – 80% of AMI Very low-income – 50% of AMI
21. Overview of Programs - HOME Rent limits Two HOME rent limits for the HOME program: High HOME rent and low HOME rent – the maximum rents that owners can charge Published annually by HUD
22. Overview of Programs - HOME HOME projects with five or more HOME units must have 20% of HOME units designated Low HOME Rent units Remaining units can be High HOME Owner must continuously maintain this mix during the affordability period
23. Regulatory Agencies Internal Revenue Service (IRS) Bureau of the US Department of the Treasury Allocates funds to each state on a per-capita basis
24. Regulatory Agencies Housing finance agencies (HFA) State-chartered authorities established to help meet the affordable housing needs of the residents of their states Administrator of LIHTC program for IRS “Eyes and ears” of the IRS Perform desk audits; inspect housing; inspect tenant files Issue reports of noncompliance to IRS utilizing IRS Form 8823
25. Regulatory Agencies Housing and Urban Development (HUD) Contracts with entities that actually build, manage, and maintain the buildings and administer rent subsidy programs Public housing agencies (PHAs) in the public sector Owners in the private sector
26. Regulatory Agencies Housing and Urban Development (HUD) Contracts with entities that actually build, manage, and maintain the buildings and administer rent subsidy programs Public housing agencies (PHAs) in the public sector Owners in the private sector
27. Regulatory Agencies Contract administrators (CAs) – PBRA Program compliance function Ensures HUD-subsidized properties serving eligible families at the correct level of assistance, Asset management function Ensures the physical and financial health of HUD properties
28. Regulatory Agencies Contract administrators (CAs) Generally housing agencies State housing finance agencies Local housing authorities Some partner with companies specializing in this type of work
29. Regulatory Agencies Public housing authorities (PHAs) Created through state enabling legislation Contractual relationship with HUD through the annual contributions contract (ACC)
30. Regulatory Agencies Participating jurisdictions (PJs) Any state or local government that HUD has designated to administer a HOME program Allocates the HOME funds Conducts compliance activities throughout the project’s affordability period
31. Regulatory Documents Successful management comes from a thorough understanding of all governing regulatory documents Key information outlined in documents such as Affordability/compliance periods Income limits Number of units rent restricted
32. Regulatory Documents Key regulatory documents – LIHTC Section 42 of the Internal Revenue Code (IRC) and related regulations The Qualified Allocation Plan (QAP) The Tax Credit Application Regulatory Agreement IRS Form(s) 8609 – one for each building The state-specific LIHTC compliance manual
33. Regulatory Documents Key regulatory documents – LIHTC HUD Handbook 4350.3 Guide for Completing Form 8823: Low Income Housing Credit Agencies Report of Noncompliance or Building Disposition General Explanation of the Tax Reform Act of 1986
34. Regulatory Documents Key regulatory documents – PBRA 24 CFR Part 880 (for new construction) 24 CFR Part 881 (for substantial rehabilitation) State housing finance agencies 24 CFR Part 883
35. Regulatory Documents Key regulatory documents – PBRA The Housing Assistance Payments (HAP) Contract HUD Handbook 4350.3 Occupancy Requirements of Multifamily Subsidized Housing Programs HUD Handbook 4350.1, Multifamily Asset Management and Project Servicing HUD Handbook 4381.5, The Management Agent Handbook HUD Handbook 8025.1, Implementing Affirmative Fair Housing Marketing Requirements for Multifamily Housing
36. Regulatory Documents Key regulatory documents – PBV 24 CFR Part 983 (PBV) 24 CFR Part 982 and 5 (HCV) With the exception of the sections that are not applicable as described in 24 CFR Part 983
37. Regulatory Documents Key regulatory documents – PBV The Annual Contributions Contract (ACC) Administrative plan, agency/annual plan HUD 52578-B Similar to family obligations in voucher Project-Based Voucher Housing Assistance Payment Contract (PBV-HAP contract)
38. Regulatory Documents Key regulatory documents – PH 24 CFR Parts 5, 8, 100, 902, 903, 945, 960, 965, 966 The Annual Contributions Contract (ACC) The Admissions and Continued Occupancy Policy (ACOP) Five-Year Plan / Annual Plan The public housing lease
39. Regulatory Documents Key regulatory documents – HOME Authorized under Title II of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12701 et seq.) 24 CFR Part 92
40. Regulatory Documents Key regulatory documents – HOME Written agreement Deed restrictions HOME Loan Agreement PJ-specific HOME compliance manual Compliance in HOME Rental Projects: A Guide for Property Owners http://www.hud.gov/offices/cpd/affordablehousing/library/modelguides/2009/2009homerentalpo.cfm
41. Managing Eligibility in Blended Occupancy Projects
42. Managing Eligibility – LIHTC Tenants must be income-eligible Household’s anticipated annual gross income must be at or below the applicable income limit 50% or 60%—as elected by the owner on IRS Form 8609 Household income calculated according to Section 8 using the HUD Handbook 4350.3
43. Managing Eligibility – LIHTC Tenants must be income-eligible Project may have lower income targeting requirements Usually 30% of AMI Pay special attention to the set-asides in the project’s regulatory agreement
44. Managing Eligibility – LIHTC Citizenship status No requirement to verify citizenship status Nor does the program prohibit admission to a LIHTC unit based on a household member’s citizenship status A combined funding unit with PBRA, PBV, or PH must comply with citizenship requirements for its respective program
45. Managing Eligibility – LIHTC SSN requirements No requirement to verify social security numbers for the household A combined funding unit with PBRA, PBV, or PH must comply with SSN requirements for its respective program
46. Managing Eligibility – LIHTC Student status Units comprised entirely of full-time students do not qualify as LIHTC units
47. Managing Eligibility – LIHTC IRS definition of student An individual, who during each of 5 calendar months during a calendar year in which the taxable year of the taxpayer begins, is a full-time student at an educational organization described in IRC §170. The five calendar months do not need to be consecutive.
48. Managing Eligibility Student status Part-time students are okay! If, however, the entire household consists of full-time students, the unit is not considered an LIHTC unit, unless the student falls in an exemption category
49. Managing Eligibility – LIHTC Exemption categories: A student is receiving assistance under Title IV of the Social Security Act (TANF) A student was previously under the care of a state foster care program A student is enrolled in a job training program receiving assistance under JTPA or similar program Household consists of a single parent and his/her dependents, where neither the single parent nor their children are dependents of another individual Household consists of persons who are married and eligible to file a joint tax return
50. Managing Eligibility – LIHTC Income limits Published by HUD each year Income limit table to be used is determined by the Placed In Service date The Placed in Service date is the date all compliance activities begin for a LIHTC building Revised income limits must be implemented within 45 days of HUD publishing the limits
51. Managing Eligibility – LIHTC Income limits Beginning in 2009, HUD published separate income limits for LIHTC projects These income limit tables are referred to as multifamily tax subsidy projects(MTSP)
52. Managing Eligibility – LIHTC Staff/Manager units If one or more units in a LIHTC project are used for on-site staff, one of the following will apply: The unit is considered a rental unit staff must be a qualified LIHTC household OR The unit is considered common area Staff does not have to be a qualified LIHTC household Must be full-time
53. Managing Eligibility – PBRA Tenants must be income-eligible Household’s anticipated annual gross income must be at or below applicable income limit Either 80% or 50% of AMI Program and project eligibility must be determined Applicants must be eligible to reside in the specific project to which they have applied
54. Managing Eligibility – PBRA Three things may affect an applicant’s eligibility for a particular project: Extent to which all or some units are designated for specific family types; Project-specific occupancy standards, family size, and the unit sizes available; and A family’s intention to lease using a housing choice voucher subsidy
55. Managing Eligibility Citizenship status – PBRA, PBV and PH No family may receive PBRA, PBV or PH assistance prior to the affirmative establishment and verification of eligibility of at least one family member
56. Managing Eligibility Citizenship status – PBRA, PBV and PH All applicants must be given notice of the requirement to submit evidence of citizenship or eligible immigration status at the time of application All family members, regardless of age, must declare
57. Managing Eligibility Citizenship status – PBRA, PBV, and PH Each member will be: Citizen or national Eligible immigrant Ineligible noncitizen
58. Managing Eligibility Citizenship – PBRA, PBV and PH Households will fall into one of the following categories: All members citizens or eligible immigrants Some members eligible and some ineligible (mixed family) Receive prorated assistance All members are ineligible noncitizens Not eligible for assistance
59. Managing Eligibility SSN requirements – PBRA, PBV and PH All applicants (except for noncontending members) must disclose and document a complete and accurate SSN for each household member, including foster children, foster adults and live-in aides
60. Managing Eligibility – PBRA and PBV Sole residence requirement Tenants receiving PBRA or PBV assistance must have only one residence and receive assistance only in that unit and under no circumstances benefit from multiple subsidies
61. Managing Eligibility Student status – PBRA and PBV Assistance cannot be provided to any individual who is… Enrolled as either a part-time or full-time student at an institution of higher education for the purpose of obtaining a degree, certificate, or other program leading to a recognized educational credential
62. Managing Eligibility – PBRA and PBV And is… Is under the age of 24; Is not married; Is not a veteran of the U.S. military; Does not have a dependent child; Is not living with his or her parents who are receiving Section 8 assistance
63. Managing Eligibility – PBRA and PBV UNLESS… The student is eligible and the student’s parents (individually or jointly) are income eligible for the program
64. Managing Eligibility – PBRA, PBV and PH Equal Access Final Rule: HUD-assisted housing must be made available without regard to actual or perceived sexual orientation, gender identity, or marital status Administrators and participating owners may not inquire about the sexual orientation or gender identity of an applicant or occupant for the purposes of making eligibility determinations
65. Managing Eligibility – PBRA, PBV and PH Required denial of admission See TSP (PBRA), ACOP (PH), or admin plan (PBV)
66. Managing Eligibility – PBV and PH Unique to PBV and PH: PIH 2012-10 If family otherwise eligible, they may maintain position on waiting list for a period of time per PHA policy If all household members have not disclosed their SSN when unit becomes available, the PHA must offer the unit to the next eligible family on the waiting list
67. Managing Eligibility – PH Tenants must be income-eligible A PH household’s anticipated annual gross income must be at or below 80% of AMI Income limits are only applied at admission
68. Managing Eligibility – PH Student status Student rules in other HUD programs do NOT apply to PH PIH Notice 2005-16 encourages policy for determining and verifying the eligibility of full-time college students of non-parental/guardian households
69. Managing Eligibility – HOME Tenants must be income-eligible Two income limits: High HOME Income Limits (80% AMI) Low HOME Income Limits (50% AMI) All HOME-assisted units must be occupied by low-income households at or below 80% (AMI) PJ determines the definition of annual income to be used
70. Managing Eligibility – HOME Tenants must be income-eligible Projects with 5+ HOME-assisted units: At least 20% of the units must be rented to households at or below 50% percent AMI These are called the Low HOME income limits
71. Managing Eligibility – HOME Citizenship status No requirement to verify citizenship status No prohibition of admission based citizenship status Unit with PBRA, PBV, or PH must comply with citizenship requirements for its respective program
72. Managing Eligibility – HOME SSN requirements No requirement to verify social security numbers for the household A combined funding unit with PBRA, PBV, or PH must comply with citizenship requirements for its respective program
73. Consent & Verification – LIHTC Tenant Income Certification (TIC) is required for LIHTC households Must be signed by all adult household members before move-in and at annual recertification Information on TIC similar to 50059/50058 form State-specific TIC
74. Consent & Verification – LIHTC Owner must perform due diligence verifying income Due diligence = to go beyond the minimum All sources of income and assets must be verified to establish initial LIHTC eligibility following the HUD Handbook 4350.3 Preferred verification method is third-party verification
75. Consent & Verification – LIHTC Verifications can be no older than 120 days before the effective date of the tenant income certification (TIC) IRS does not require specific verification forms Check with state agency on required verification forms
76. Consent & Verification – LIHTC Pay special attention to verifying full-time student status The IRS has stated that acceptable methods of verification include third-party verifications, oral statements, or a review of documents submitted by the student Check with state agency
77. Consent & Verification FormsPBRA, PBV, PH HUD-9887 and form HUD-9887-A (PBRA) and HUD-9886 (PBV & PH) Each household member age 18 and older must sign form (head, spouse, cohead regardless of age) Regardless of whether they report income
78. Consent & Verification FormsPBRA, PBV, PH Form HUD-92006, Supplement to Application for Federally Assisted Housing, must be provided to households at the time of application The household is not required to provide the information
79. Verification – PBRA SSN verification Social Security card Original document from SSA Original document issued by a federal or state agency And more…
80. VerificationPBV and PH SSN verification PHA must accept any of the following: SS card SSA-issued document Original document issued by federal, state, or local government agency Containing name & SSN 80
81. Verification Timeframes– PBRA Verifications for eligibility are valid for 120 days from the date of receipt by the owner
82. Verification Timeframes – PBV PHAs must obtain verification of eligibility no more than 60 days before initial issuance of a voucher
83. Verification Timeframes – PH Verifications for eligibility are generally valid for no more than 90 days Public Housing Occupancy Guidebook
84. Consent & Verification – HOME The HOME program requires verification of household income to determine program eligibility Applicant/tenant self-certification is not allowed as a verification method to determine program eligibility, neither is a certification from another program Check with PJ on required verification forms
85. Consent & Verification – HOME Owners must obtain verification of eligibility no more than 6 months before executing a HOME lease agreement Verifications used for move-in must be from source documents Can’t use form HUD-50059 or HUD-50058
86. Consent & Verification – Comparison Most restrictive program wins! PBV PHAs must obtain verification of eligibility no more than 60 days before initial issuance of a voucher PH Verifications for eligibility are generally valid for no more than 90 days Public Housing Occupancy Guidebook HOME Owners must obtain verification of eligibility no more than 6 months before executing a HOME lease agreement LIHTC Verifications can be no older than 120 days before the effective date of the tenant income certification (TIC) PBRA Verifications for eligibility are valid for 120 days from the date of receipt by the owner
87. Determining Rents
88. Rents – LIHTC Rents aren’t based on a percentage of income, but owners must determine the household’s gross annual income before move-in following HUD Handbook 4350.3 And annually in certain LIHTC projects Income is about eligibility, not about rent
89. Rents – LIHTC Unit rent determination Unit rents are set by project owner Unit rent is the rent paid by the LIHTC household Unit rent + utility allowance cannot exceed HUD published LIHTC rent limits
90. Rents – LIHTC Unit rent determination Rents over LIHTC limit cannot be charged except for: Section 8 participants – PBRA, PBV or HCV – as long as the income is based on HUD requirements and there is a HAP contract and the owner receives subsidy on behalf of a participant
91. Rents – LIHTC Utility allowances Unit rent + utility allowance cannot exceed HUD published LIHTC rent limits Included if tenant pays for any utilities Owner can choose from (check with state agency for fee, if any): PHA utility allowance Local utility allowance estimate HUD utility schedule model Engineering consumption model
92. Rents – LIHTC Once a unit is out of compliance with rent limits, it’s out of compliance for the rest of the owner’s tax year! Example: A unit out of compliance on April 2, 2012 will remain out of compliance until January 1, 2013
93. Rents - PBRA Rents are based on a percentage of income HUD Handbook 4350.3 Chapter 5 TTP – UA = household rent HAP is amount owner bills HUD for each month, difference between TTP and gross rent Reported on 50059
94. Rents – PBRA Unit rent determination Project rent is established and approved by HUD or contract administrator
95. Rents – PBRA Utility allowances Estimate of average monthly utility bills No uniform guidelines as to how UA should be calculated Check with HUD or CA Varies between HUD offices and CA
96. Rents – PBV Rents are based on a percentage of income Family income determination Follows HCV program rules TTP – UA = tenant rent HAP is amount PHA pays owner each month- differs by family Reported on 50058
97. Rents – PBV Unit rent determination Established at beginning of HAPC term Owner may request increases
98. Rents – PBV Utility allowances Established and maintained by PHA For tenant-paid utilities
99. Rents – PH Family income determination Rent is income-based or flat TTP – UA (if any)= tenant rent Reported on 50058
100. Rents – PH Unit rent determination Flat rent and income-based rent
101. Rents – PH Utility allowances PHA established Any unit for which family pays utilities Flat rent families will not have a UA applied to their rent
102. Rents – HOME Rents aren’t based on a percentage of income, but owners must determine the household’s gross annual income before move-in using source documentation PJ determines the definition of annual income
103. Rents – HOME Unit rent determination Unit rents established by owner Unit rents must be approved by the PJ Unit rent + utility allowance cannot exceed HUD published rent limits: Low HOME High HOME
104. Rents – HOME Low HOME Rent – Maximum amount of rent that can be charged to very-low income (50%) households High HOME Rent – Maximum amount of rent that can be charged to low-income (80%) households
105. Rents – HOME Unit rent determination Units with HOME + LIHTC Use the LOWER of the HOME or the LIHTC maximum rent amounts Remember to compare the utility allowance schedules if using two separate utility allowances
106. Rents – HOME Unit rent determination Units with HOME + PBRA that are identified as Low HOME may exceed HUD published Low HOME rent limits if: The household is VLI (50% AMI); AND The household’s tenant paid rent does not exceed 30% of the household’s adjusted income If the above is true, maximum Low HOME rent = Tenant paid rent + Project based subsidy
107. Rents – HOME Unit rent determination Properties with HOME + HCV and/or PBV Maximum unit rent cannot exceed HUD published rent limits for Low and High HOME Tenant paid rent + HAP cannot exceed HUD published rent limits
108. Rents – HOME Utility allowances Provided by PJ May be different than LIHTC utility allowance
109. Managing Eligibility in Blended Occupancy Projects Bottom line Income eligibility varies by program. Just because a family is eligible under one program, does not mean they are automatically eligible under another Rent limits vary by program Student rules in LIHTC and HUD programs are not identical Only PBRA, PBV and PH have SSN and citizenship requirements Utility allowances vary by program Eligibility should be determined according to the most restrictive program
110. Thank you for participating in today’s Housing Help Session! Hope to see you again!