Rhonda Kimble- Multi-Funded Projects/WCMS

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HOME Multi Family
HOME/LIHTC TRAINING
1
HOME Monitoring Operations
Manual
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The 2010 HOME Monitoring Operations
Manual was completed by ICF International.
ICF provides technical assistance and
training to HUD program recipients the
manual has not changed
The Manual is more inclusive of ADFA rules
and regs
The Manual provides monitoring check
sheets for the HOME programs
2
HOME Program
Owner Responsibilities
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The ALL important…..
HOME AGREEMENT contains the
following:
The amount of funding
The total number of units, the number
of affordable units and how many of
the affordable units are HOME units
3
HOME Agreement cont.
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The gross annual income
requirements and rent restrictions for
such units-the set asides
ADFA set asides are 60% High HOME
or 50% Low HOME
4
HOME Agreement cont.
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Terms regarding payments from ADFA
during project completion
Loan terms-reserves, operating,
security deposits will be monitored
Consequences of Breaching any terms
of the Agreement
5
Affordability cont.
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REHAB or ACQ of EXISTING HSG
<$15,000/unit =
5 YEARS
$15,000/unit-$40,000= 10 YEARS
>$40,000/unit=
15 years
REFI OF REHAB PROJECT
Any amount =
15 years
NC or Acq of New Hsg= 20 years
6
HOME Agreement cont.
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The Agreement also includes:
Affirmative marketing requirements
Anti-lobbying rules
Lead based paint requirements, if
applicable
Tenant data requirements
Workplace requirements
8
HOME Agreement cont.
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Section 3 requirements (hiring lower
income persons)
Fair Housing reporting, regulatory and
recordkeeping requirements
Causes for Debarment and
Suspension
Remedies on Default
9
HOME Agreement cont.
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Records are to be retained 5 years AFTER
the affordability period ends and the owner
shall furnish and cause its subcontractors to
furnish all reports, books, records and
accounts, by ADFA, the Department of
Housing and Urban Development or its
agents or other authorized federal officials
for purposes of investigation to ascertain
compliance
10
HOME Agreement cont.
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ADFA reserves the right to inspect at
any time during normal business hours
any and all HOME activity
accomplished under this Agreement to
ensure compliance with HQS,
(Housing Quality Standards), minimum
housing codes, zoning, building and
fire codes
11
HOME Agreement cont.
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The owner also acknowledges that they will make
available at any time during normal business hours
ALL financial, compliance records of activities
pertaining to funding and the development covered
by this Agreement to allow ADFA to conduct
monitoring, performance, and compliance reviews
and evaluations.
12
HOME Units
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A minimum of 20% of HOME units must be
at the 50% HOME income limit, the
remaining HOME units must be at the 60%
HOME income*
HOME units have two (2) rent limits;
High HOME rent-50%
LOW HOME rent-60%
*HOME income limits and rents differ from
LIHTC
13
HOME Units
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Fixed Units-the HOME units will
always remain in specific units
Floating Units-the HOME unit
designation may float across the
project to the next available unit same
size or greater
14
HOME Units
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The income limit requirement is met
upon initial occupancy (move-in) at
either 50% or 60% as designated by
the HOME Agreement
The 50% unit is given the Low HOME
rent designation
The 60% unit is give the High HOME
rent designation
15
HOME Units
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If at recertification the income rises ABOVE
50% (low HOME) but is below 60% (High
HOME) the following applies depending on
the type of HOME unit:
Fixed: The unit would become a High
HOME rent unit and the next available
FIXED unit would become a low HOME rent
unit
16
HOME Units
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Floating: The unit would become High
HOME 60% rent and the next
comparable unit same size or greater
must be reoccupied by a household
with an income at or below 50% (low
HOME)
*unit size requirements may differ
when multiple programs are used
17
HOME unit
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If the incomes rise ABOVE 80% median at
recertification, the household must pay the rent
permitted by law or 30% of the family’s adjusted
monthly income at recertification:
FIXED: The unit remains a HOME unit until move
out or the HOME rent is reassigned to the next
available unit
FLOATING: The unit remains a HOME unit until the
next available unit of comparable size or greater*
receives the affordable designation
*use the most restrictive rule if multiple programs
are used
18
HOME monitoring
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Monitoring is based on the TOTAL
number of units on the property
1-4 units = every 3 years
5-25 units = every 2 years
26 or more = annually
19
LIHTC/HOME projects
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Affordable Unit designations (30%,
50%, 60%) are per building in LIHTC
and do not float across the project in
Arkansas without being an income
qualified unit. Caution must be taken to
use the most restrictive requirement,
i.e., rents and incomes, in combined
program units
20
LIHTC/HOME projects
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If you have a HOME unit, you must use the
applicable HOME income limits and HOME
rents for those units within a tax credit
project
If you received a 9% tax credit, at least 40%
of the units must move in at the 50% limit
per building if the project placed in service
prior to 2008, using the most restrictive limit
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21
LIHTC/HOME units
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Your HOME unit maximum allowable rent is
calculated differently:
HOME-what the tenant pays, plus the utility
allowance, PLUS the rental assistance
cannot exceed the maximum allowable
HOME rent
LIHTC-what the tenant pays, plus the utility
allowance cannot exceed the maximum
allowable LIHTC rent
22
LIHTC 140% over income unit
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Must return to applicable fraction
#of units or square footage, which ever is greater
Applicable fraction is total LIHTC units/total units or
LIHTC sq ft/Total sq footage WHICHEVER IS
GREATER. This is established in the first year
Eligible Basis (bricks, i.e. building costs) X
Application Fraction (% of LIHTC units over total
units) or (LIHTC unit square footage over total
square footage =Qualified Basis
Qualified Basis x Applicable Credit = Annual Tax
Credit
23
LIHTC/HOME units
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CAUTION: If you are using your
HOME units in your tax credit set aside
make sure that you watch the income
limits, rent limits, subsidy amounts and
transfers
24
LIHTC/HOME/RD
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High HOME (60%) rents can be lowered to
project based RD
Low HOME (50%) rents can be raised to RD
rents
HIGH (60%) HOME rents CANNOT raised
to RD limits
PROJECT BASED-Raise low income-50%
-lower high income-60%
HIGH HOME RENT (60%)CAN NOT GO UP
TO PROJECT BASED LIMIT
25
LIHTC/HOME/other projects
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LIHTC and HOME recertifications are
effective on the original move in date
(the first day of occupancy) and
annually thereafter
Documents and signatures can be
processed and are acceptable within
120 days of or before the effective
date
26
LIHTC/HOME/other projects
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LIHTC and HOME use the Section 8
4350.3 definitions of income to
determine household eligibility
HOME and LIHTC use gross annual
income to determine eligibility and
exceeding limits
HOME totals income from ALL assets;
not just those over $5,000
27
LIHTC/HOME/other projects
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REMEMBER: In HOME, the tenant
payment, utility allowance, plus
subsidy cannot exceed the maximum
allowable HOME rent.
REMEMBER: Project based rental
assistance rules
28
LIHTC/HOME/other projects
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LIHTC-As long as the tenant payment
plus the utility allowance does not
exceed the maximum allowable rent,
the household is qualified
Use the most restrictive rules
pertaining to rents and over income
recertifications
29
LIHTC/HOME/other projects
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There is not an interim recertification
requirement in the HOME or LIHTC
programs. All projected information
must be completed within 120 days
prior to the effective date
You are required to use the ADFA
Tenant Income Certifications for
programs administered by ADFA.
30
LIHTC/HOME/other projects
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LIHTC projects are monitored within 180
days following the end of the first credit year
and every three years thereafter. However,
ADFA may monitor more often if necessary
(for example non compliance found in 50%
of units or files reviewed).
HOME is monitored according to the TOTAL
number of units in the projects.
31
LIHTC/HOME/other projects
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HOME Monitoring:
1-4 units every three years
5-25 units every two years-ADFA may
also monitor LIHTC at this time if
combined with HOME
26 or more units annually
LIHTC-monitored a minimum of every
three years
32
Other considerations
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Leases-HOME specifically restricts
prohibitive language in leases - see
lease check sheet
Applications-Asset information must be
more inclusive if there are HOME units
Addendums may be needed for
leases, applications, and tenant
income certifications.
33
KEY Project Placed in Service
income limit dates
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Before January 1, 2009 (On or Before
12/31/2008)
Between January 1, 2009 and May 14,
2010
After May 14, 2010
34
Go to Novogradac.com
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This site has limits including HERA and rural
areas;
Compare to HUD income limits and
regulations
35
Other programs income limits
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USDA you must comply with the more
strict program rules
HOME program rent and limits must
be used for HOME specific units.
36
Compliance Audit
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All certifications and recertifiations must be current.
If you fail to recertify in the LIHTC program, as long
as the recertification is completed prior to the date
of an audit notification, an 8823, Report of non
compliance to the IRS, will not be issued,
HOWEVER, this does not apply to the HOME units,
which must be completed on time or they will be
non compliant. Habitual tardiness will be reported
as non compliance and may affect owner’s future
funding.
37
Compliance Audit
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To take advantage of the rule just
mentioned, new management
companies should audit all files once
they take possession of properties.
Files should be documented and
brought current as soon as possible. If
not, an 8823 Report of Non
Compliance could be issued to the
IRS.
38
Compliance Audit
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WCMS Web Compliance Management
System information must be updated no
later than the 15th of the following month.
ANNUALLY each Fall ADFA transfers
WCMS data to HUD which will report the
LIHTC data to Congress.
Projects must be clear of All ERRORS no
later than August 15th each year.
39
Training
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Check the ADFA website monthly for
upcoming training classes and other
important ADFA information.
www.arkansas.gov/adfa
40
ADFA
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Please feel free to contact me, Rhonda
Kimble at
[email protected]
OR
(501) 682-5936
41
QUESTIONS
42
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