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LIHTC Updates

LIHTC Updates

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LIHTC Updates

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    1. LIHTC Updates

    2. Annual Income Certifications 100% LIHTC HOME HERA/Special Income Limits

    3. Revised Utility Allowance Regulation 1.42-10 Owner - Energy Consumption Model HUD Utility Schedule Model

    4. Physical Deficiencies UPCS Standard REAC Protocol IRS Form 8823 Report of Noncompliance

    5. HUD Data Collection and Reporting Tenant Data Race, Ethnicity, Family Composition, Age, Income, Disability Status, Tenant Rent, & Rental Assistance Electronic submission 2nd Qtr 2010

    6. Post Year 15 Compliance Review Every 4 Years 10% File Review and Unit Inspection Annual Income Certification Student Status

    7. Questions? Contact Information: Susan Tomasetti 310-9292 stomasetti@nhhfa.org Thank you

    8. Changes in Section 8 Contract Renewals and Rent Adjustments

    9. Section 8 Renewal Policy Guidance for the Renewal of Project-Based Section 8 Contracts

    10. Multifamily Assisted Housing Reform and Affordability Act (MAHRA) Properties that have not renewed their HAP contract since 1997 are Pre-MAHRA and properties that have renewed their HAP contract since 1997 areMAHRA HAP Contracts that have NOT yet renewed under HUD's 1997 MAHRA that are eligible for the Annual Rent Adjustment (AAF) may be eligible for a special rent adjustment.

    11. Six Options Option 1 - Mark-Up-To-Market Option 2 - Renewal with Current Rents At or Below Comparable Market Rents adjusted by an OCAF or Budget Based Rent Adjustment. ( 4/13/09 Change allows projects that are exempt from OAHP restructuring to cut rents to comparable market rents. Current debt service is used in Budgets)

    12. Option 3 Referral to OAHP (Office of Affordable Housing Preservation ) for processing because the contract has rents greater than market and is subject to an FHA-insured or HUD-held mortgage. Option 4 Renewal of contracts for exception projects, which are exempt from debt-restructuring pursuant to 514(h) of MAHRA or are not an eligible multifamily housing project as defined in section 512(2) of MAHRA. Lesser of OCAF or Budget Based. Current HUD policy is that ALL Option Four budget based rent calculations must use original debt service placed on the property by the original owner.

    13. Option 5 - Renewal of contracts for Portfolio Reengineering Demonstration or Preservation projects Option 6 Opt-Out

    14. Submission Deadlines: Owners must submit the required documentation to NHHFA no later than 120 days prior to the contract expiration date. If you are submitting a renewal request that requires a Rent Comparability Study (RCS) no more than 180 days can lapse between the date that the appraiser has signed the letter to the owner signifying that the RCS is complete and the date that the owner submitted the RCS to NHHFA. If the submission is received late, the HAP payment will likely be delayed. Please make every effort to provide NHHFA with a complete renewal submission in a timely manner.

    15. Change Highlights

    16. RHIIP Listserv Posting #89February 22, 2008 The Section 8 Renewal Policy Guidebook has been updated to: Remove some forms, worksheets and the renewal contracts, which are obsolete. The forms and the accompanying instructions are now found on HUDCLIPS. The worksheets and latest contracts are on the web at http://www.hud.gov/offices/hsg/mfh/mfhsec8.cfm. The updated Guidebook is dated 1/15/08 (revised as of 12/12/06) and is posted at the following website address: http://www.hud.gov/offices/hsg/mfh/mfhsec8.cfm

    17. RHIIP Listserv Posting #113 July 18, 2008 Explanation of Change The instructions contained in the note at the top of page 2 in Chapter 14, dealing with renewals of 524(b) projects has been corrected. The words and subsequent renewal have been added so that RHS projects like all other 524(b) projects are subject to the lesser of test at both initial and subsequent renewal.

    18. RHIIP Listserv Posting #147 April 15, 2009 a. Chapter 4, Option Two Contract Renewals for Other Projects with Current Rents At or Below Comparable Market Rents, has been updated. The revision includes two major changes: Permits increased distributions to for-profit owners that have or are willing to enter into long term Section 8 contracts. (20 Years) Directs the Owner to use the projects current debt service when preparing a budget-based rent increase.

    19. b. The opening paragraph of Chapter 14, RHS Section 515/8, is revised to clarify that RHS projects are not eligible for a debt restructuring under MAHRA. c. Attachment 2, Glossary of Terms, has been updated. d. Four new forms are being added to the Guide. The four collateral assignment forms have been revised to require signature by HUD rather than by HUD or the PHA CA. These forms are to be used verbatim, i.e., without any alteration of any kind to the language or form.

    20. The forms show that HUD has provided written consent permitting the owner to assign the HAP contract. Attachment 21, Consent to Assignment of HAP Contract as Security for Financing. Attachment 22, Consent to Assignment of HAP Contract as Security for FNMA Financing. Attachment 23, Consent to Assignment of HAP Contract as Security for FREDDIE MAC Financing. Attachment 24, Consent to Assignment as Security For FNMA Credit Enhancement

    21. Option 4 - Budget Based Rent Increases Rent Adjustments: The owner must provide the tenants notice of all proposed rent increases. The Notice to Tenants must be posted 30 days prior to submitting the renewal information to NHHFA. The contract rents at the propertys Initial and Subsequent Contract Renewals are determined by awarding the lesser of the OCAF or budget based rent adjustment.

    22. Budget-based rent increase documentation must be prepared in accordance with HUD Handbook 4350.1, Chapter 7 or an approved Rural Development budget with Attachment 5 of the Section 8 Renewal Policy Guidebook.

    23. Whats The Difference Between Option 4 & Option 2? Option 2 requires the property to submit a Rent Comparability Study (RCS) every 5 years, starting at the initial renewal term. The rents approved under Option 2 can never exceed the comparability results. Option 4, initial and subsequent renewals require the property to submit both the OCAF rent adjustment and the budget-based rent adjustment, prepared in accordance to the HUD Handbook, Chapter 7. The rents at the initial and subsequent renewals are to be adjusted by LESSER of the OCAF or the budget. Option 2 contract renewals allow the property to select to request either the OCAF or the budget based rent adjustment.

    24. Auto OCAF The purpose of the Automatic OCAF Rent Increase is to further automate the process of an OCAF rent increase for section 8 contracts in Amend Rents years. Currently, HUD/PBCA staff send a reminder notice to the O/A advising of the 120 day time period to submit their rent increase. The O/A manually calculates the OCAF rent increase for a project and mails the submission package to the responsible HUD/PBCA staff for processing. Once the package is received by HUD/PBCA, the date the package was received is entered into REMS. The package is reviewed for completeness and various entries are entered into REMS.

    25. With the automated feature, HUD/PBCA will have less entries in REMS and fewer steps to take to complete this Task. The data relating to the OCAF rent increase is already present in REMS and the new rents will automati-cally be calculated. O/As that meet certain criteria will no longer be required to submit a package to obtain an annual OCAF rent increase on their Amend Rents date.

    26. What does this mean for the O/A? The O/A will no longer need to calculate and supply the OCAF worksheet as a part of the package. If the Debt Service has remains the same as the previous adjustment, the RCS (if Applicable) is current, and the UA (if applicable) remains the same, the O/A receives the a-OCAF Notification Letter he/she: Option 1 Assuming a 5 year contract, automatically adjust by OCAF in years 2 through 5. Elects to receive the automatic rent increase and returns completed/signed Rent Schedules and Exhibit A to the PBCA within 10 business days.

    27. Option 2 Assuming a 5 year contract, automatically adjust by OCAF in years 2 through 5. Requests renewed current rents and returns completed/signed Rent Schedules and Exhibit A to the PBCA within 10 business days. At the owners request, and at HUDs discretion if eligible, process a BBA. Requests a Budget Based Adjustment and return the regular package to the PBCA within 10 business days.

    28. Option 3 After OAHP, process automatic OCAF. Elects to receive the automatic rent increase and returns completed/signed Rent Schedules and Exhibit A to the PBCA within 10 business days. Option 4 Assuming a 5 year contract, automatically adjust by OCAF in years 2 through 5. Requests renewed current rents and returns completed/signed Rent Schedules and Exhibit A to the PBCA within 10 business days. At the owners request, and at HUDs discretion if eligible, process a BBA. Requests a Budget Based Adjustment and return the regular package to the PBCA within 10 business days.

    29. Option5 For Demos with restructured loans only, process automatic OCAF for Life of Use Agreement. Elects to receive the automatic rent increase and returns completed/signed Rent Schedules to the PBCA within 10 business days.

    30.

    32. Please note: NHHFA does not intend this to be an all-inclusive list of federal requirements. Please review the Section 8 Contract Renewal Policy Handbook to gain a full understanding of all requirements.

    33. EIV: Enterprise Income Verification System The Right Benefits to the Right Persons

    34. EIV Website http://www.hud.gov/offices/hsg/mfh/rhiip/eiv/eivhome.cfm Sign up for the Multifamily Housing RHIIP Listserv at: http://www.hud.gov/subscribe/mailinglist.cfm

    35. EIV Webcast Training Multifamily Enterprise Income Verification, December 16-17, 2008: http://www.hud.gov/webcasts/archives/multifamily-eiv.cfm EIV Webcast Questions and Answers: http://www.hud.gov/offices/hsg/mfh/rhiip/eiv/training/eivwebcastqna61209.pdf

    36. Mandatory Use of EIV Currently, use of EIV is voluntary. Refinement of Income and Rent Determination Requirements in Public and Assisted Housing Programs; Final Rule dated January 27, 2009 makes the use of EIV mandatory effective January 31, 2010. O/As are strongly encouraged to gain access to and become familiar with EIV in preparation for full implementation.

    37. What is the EIV System? An upfront income verification tool available to program administrators to validate tenant reported wage, unemployment, and social security income during mandatory annual and interim recertifications of income

    38. Security

    39. Computer Matching Agreements Social Security Administration (SSA) Social Security (SS) Supplemental Security (SSI) Department of Health and Human Services (HHS) National Directory of New Hires Monthly Employer New Hires (W-4) Quarterly Wage for Federal and Non-Federal Employees Quarterly Unemployment Data

    40. EIV Data Available To: Owners/Agents Contract Administrators (CAs) Independent Public Auditors (IPAs) HUDs Office of Inspector General (HUD-OIG)

    41. Independent Auditors May View EIV Reports The following criteria must be followed: They will access NDNH information only within hard copy files and only within the offices of the O/A They will not transmit or transport NDNH information in any form They will not enter NDNH information in any portable media

    42. Independent Auditors May View EIV Reports (Cont.) They will sign non-disclosure oaths (or similar documentation) that the NDNH information will be used only for the purpose of the audit They will not duplicate NDNH information or re-disclose NDNH information to any user not authorized by 4359(j)(7) and identified within the CMA

    43. EIV Reports May Be Provided to Staff Without User Access Authorized EIV Coordinators or EIV Users are permitted to run EIV reports, print them out, and provide to staff Staff who view these reports do not need to be an EIV User Must be required to sign a Rules of Behavior form

    44. EIV Not Available To: Internal Revenue Service Rural Housing Services Owners/Agents must use alternative verification for Tax Credit and RD verification purposes

    45. External User (non-HUD staff) Request for EIV Access See the External (non-HUD Coordinator/User) Instructions for Applying for EIV Access for Multifamily Housing Programs on HUDs MF EIV website at: http://www.hud.gov/offices/hsg/mfh/rhiip/eiv/tracseivaccessexternal.pdf

    46. Hardcopy CAAF and UAAF Rules of Behavior - Explain the rules and responsibilities for viewing and using Privacy Act data contained in EIV, including the Users obligation to protect and secure such data from unauthorized use or viewing.

    47. Hardcopy CAAF and UAAF (Cont.) User Agreement and Certification: - Explains that by signing the form and gaining access to the system, the user agrees to comply with the rules and responsibilities outlined in the Rules of Behavior. - States the civil and criminal penalties for willful and inadvertent disclosure of EIV data.

    48. Hardcopy CAAF and UAAF (Cont.) Users must certify to completion of Security Awareness Training Questionnaire available on MF EIV website at: http://www.hud.gov/offices/hsg/mfh/rhiip/eiv/securityawareness.pdf Coordinator applicants must certify they received owner approval to access data.

    49. Securing Privacy Act Data: Protecting the Confidentiality of EIV Information Income Information reports contain sensitive data, including: - Social Security Number (SSN) - Full Dates of Birth (DOB) - First and Last Names - Physical Address of Tenant Families

    50. EIV Data for Official HUD Use Only EIV data IS only to be disclosed to authorized individuals, and used in connection with the administration of HUD rental assistance programs.

    51. EIV Data for Official HUD Use Only (Cont.) Official HUD use includes - Verification of employment and income: - at recertification - can be used at other times but must be described in the O/As policies and procedures - Monitoring and auditing O/A operations - Preventing and investigating cases of fraud, waste and abuse in HUD rental assistance programs

    52. EIV Data for Official HUD Use Only (Cont.) EIV IS NOT to be used to police tenants. For example, random checks of EIV data on a particular tenant must not be done.

    53. Sanctions Willful, and even unintentional, disclosure or inspection of EIV data can result in civil and criminal penalties

    54. Sanctions (Cont.) Unauthorized Disclosure felony conviction and fine up to $5,000 or imprisonment up to five (5) years, as well as civil damages. Unauthorized Inspection misdemeanor penalty of up to $1,000 and/or one (1) year imprisonment, as well as civil damages.

    56. NEW FINAL RULE Refinement of Income and Rent Determination Requirements in Public and Assisted Housing Programs

    57. Federal Register published January 27, 2009 Final Rule All requirements to be effective March 30, 2009 except EIV (9/30/09) Federal Register issued March 27, 2009 as a Final Rule Delay of Effective Date to 9/30/09 Final Rule published August 28, 2009 HUD delayed effective date to 1/31/10 Proposed Rule published October 15, 2009 HUD submits for public comment regulatory revisions to make the 1/27/09 final rule more clear and return other regulatory provisions to their pre-January 2009 final rule content.

    58. What does the Rule Implement? HUD delays the effective date of the January 27, 2009 final rule until January 31, 2010 Mandatory use of HUDs Enterprise Verification System Requirement for all family members to disclose a valid Social Security Number

    59. Key changes made to the Final Rule through the Proposed Rule: Deferring changes to the definition of annual income for both Multifamily and HOME Programs Deferring any changes to HUDs noncitizen regulations Simplifying Social Security Number disclosure and verification processes and to be consistent with maintaining confidentiality of these processes Required use of EIV in its entirety

    60. Mandatory Use of EIV The final rule announces the requirement for PHAs and Multifamily Housing O/As to use the Enterprise Income Verification system when verifying the employment and income of residents at the time of all certifications Social Security Number Requirements Current requirement - All household members, 6 years of age or older, are required to provide valid and accurate Social Security Numbers or sign a certification stating that no Social Security Number has been assigned. PROPOSED REQUIREMENT Part 5.216 has been amended to reflect the following: a. Complete and accurate SSN for ALL members of the household regardless of their age 1) Applicants 2) Current household

    61. APPLICANTS a. Applicants will be required to disclose and provide verification of the SSN for all members of their household b. Applicant retains their place on the waiting list if they cannot provide SSNs for all family members c. At admission, all members MUST disclose and provide documentation of their SSN before household is permitted to move-in and participate in the program CURRENT PARTICIPANTS a. Proposed rule would grandfather current participants 62 years of age or older as of 1/31/10 from having to disclose an SSN. b. Exempt current individuals who have already disclosed a valid SSN. c. Individuals who have not previously disclosed a valid SSN would be subject to the SSN disclosure and verification procedures. ADDITION OF NEW HOUSEHOLD MEMBERS UNDER THE AGE OF SIX a. Proposed rule would revise and clarify the applicability of the SSN disclosure requirements for households adding new household members under the age of six

    62. b. Processing entity shall grant an extension of one additional 90-day period if the processing entity, in its discretion, determines that the participants failure to provide documentation of a SSN for the child under six was due to circumstances that could not have been reasonably been foreseen and were outside the control of the participant. During this process the child is entitled to all benefits of being a member of the household. c. Failure to provide documentation of a SSN for the child under six by the deadline will result in applicable penalties described in 5.218

    63. ASSIGNMENT OF NEW SSN a. Processing entities have additional flexibility to determine the timing of disclosure of a newly assigned SSN b. Participant must disclose the SSN at either the time of receipt of the new SSN; next interim or regularly scheduled reexamination or recertification of family composition or income; or at such earlier time specified by processing entity. TERMINATION OF ASSISTANCE a. Exception to required termination of assistance or tenancy due to unforeseen circumstances.

    64. b. Proposed rule would revise 5.218(c) to allow the processing entity to defer termination and provide participant with an additional 90 days to disclose a valid SSN. c. ONLY if the processing entity determines that failure to comply with the SSN requirements was due to circumstances that could not have reasonably been foreseen and were outside the control of the household; d. Theres a reasonable likelihood the participant will be able to disclose the SSN by the deadline. e. Failure to disclose a SSN by the deadline will result in termination. EIV a. Proposed rule would clarify processing entities MUST use the EIV system in its entirety as a third-party source to verify tenant employment and income information during the reexaminations or recertifications of family composition and income.

    65. Required Documentation 1. Valid social security card 2. Drivers license with SSN 3. ID card issued by Federal, State, or local agency, medical insurance provider, employer or trade union 4. Earnings statement 5. Bank statement 6. Form 1099 7. See Appendix 3 of 4350.3 Rev-1 Chg. 2 Add these changes to your propertys Tenant Selection Plan once they are in effect

    66. VIOLENCE AGAINST WOMEN ACT (VAWA) VAWA provides legal protections to victims of domestic violence, dating violence or stalking. This applies to both men and women These protections prohibit O/As from denying assistance and from evicting or terminating assistance from individuals being assisted under Section 8 IF the asserted grounds for such action are an instance of domestic or dating violence or stalking October 2008 HUD issues Notice H 08-07 & October 2009 Notice H 09-15 a) Implements the Violence Against Women and Justice Department Reauthorization Act of 2005 for MF project-based Section 8 Housing Assistance Payments Program b) Provides guidance to O/As on how to implement VAWA c) Transmits the Certification of Domestic Violence, Dating Violence or Stalking, Form HUD-91066 O/As MAY request a resident to certify that he/she is a victim of domestic or dating violence or stalking

    67. d) Transmits the HUD approved Lease Addendum, Form 91067 to be used with the applicable HUD model lease. This addendum revises the lease to: i. Reflect the statutory requirements of the VAWA that are related to the Section 8 assistance programs Lease Addendum When to use it? 1. New admissions - Immediately along w/appropriate HUD model lease 2. Existing residents O/As should begin to notify residents of the modification to the lease. How? a) Follow the guidance in Chapter 6 of the 4350.3 Rev-1 Change 2 b) Forward to each resident a copy of the addendum that revises the existing lease. c) Include a letter clearly stating that the resident can either accept the modification or move but that a response is due within 30 days. The VAWA Lease Addendum must be signed by every adult member of the household. Additional lines may be added to the addendum to accommodate multiple signatures.

    68. Certification and Confidentiality a) O/As responding to an incident of actual or threatened domestic violence that could potentially have an impact on a residents continued participation may request in writing that the individual complete and sign and submit w/in 14 business days of the request, the HUD approved certification form (HUD-91066). O/As may extend this time period. b) In lieu of the certification form, O/As may accept i. A federal, state, tribal, territorial, or local police record or court record ii. Documentation signed and attested to by a professional from whom the victim has sought assistance c) Retain all documentation relating to the individuals domestic violence in a separate file that is kept in a separate secure location from other resident files Resident Selection Plans must be updated to incorporate the VAWA policies and protections To read the entire Notice, visit HUD's web site at http://www.hud.gov/offices/adm/hudclips/notices/hsg/

    69. Last week, HUD sent out an email to clarify some of the instruction provided by the notice. Please note the following clarifications: HUD has indicated that the Notice has been misinterpreted to only apply to women who are victims of domestic violence, dating violence or stalking. The statute's applicability is not gender specific and the Notice does not state that it applies only to women and contains several references to he/she when referring to the resident as being a victim of domestic violence, dating violence or stalking.