|
 Below are answers to Ask an Expert questions previously submitted to OHFA.
We will be updating this page periodically as additional questions are received. If you would like to submit a question, click on the @sk an Expert button.
A recertifying household's income should be tested against the Minimum Set-aside; therefore, 140% of the current 60% income limit should be used to determine whether the AUR must be applied.
Yes. We are anxious to provide the best possible guidance. We are currently in the process of reviewing the Handbook for necessary changes.
- Income and/or assets listed on the Sworn Income & Asset statement (SIAS), but not listed on the Tenant Income Certification (TIC)
- Management agent not signing and/or dating the TIC or SIAS
- Employment verification is not completely filled out
- Assets not third party verified or the Under $5,000 in Asset Form was used, but not filled out properly
- No move-out information in the file, e.g., date of move-out, final unit inspection, security deposit disposition
- Income listed on the data sheet of the Compliance Tool is different than the income listed on the TIC
- Verifications are not dated by verifying source
- White-Out® products are used on the forms
- Incorrect utility allowance
- Verifications are over 120 days old
- Calculations for income and/or assets are not clear
- Not comparing the income and assets from the previous certification to ensure that nothing has changed
- Changes made to either the TIC or the SIAS that are not initialed and dated by BOTH the resident and the management agent
The "Under $5K" can be used, but not on units identified as HOME-assisted units. Managers should proceed with caution. If units are "floated," a unit may be out of compliance with the HOME Program if the Under $5K is used on a newly designated, HOME-assisted unit. While the Under $5K can be used at projects with HOME funds, it may be most efficient, and protect the project's funding, by continuing to verify assets.
For properties that have both LIHTC and HOME funds, the reviews are conducted simultaneously.
Owners may use the "review of documents method" described in the HUD Handbook 4350.3. Owners may need to obtain additional first party affidavits to fill in the blanks. Documentation from the third party source, or a clarification record, indicating a fee is required for verifying information, should be in the tenant file. Note: Some application processing costs, such as the actual costs for credit checks or criminal background checks, may be passed along to an applicant provided the owner is not attempting to recover other administrative costs associated with processing the application.
Yes. The expectant mother should self-certify to the pregnancy, as described in Appendix 3 of the HUD Handbook 4350.3. The unborn child must be listed as a household member on the Tenant Income Certification.
No. Negative answers on the Sworn Income and Assets Statement should not be verified.
The higher amount should generally be used. If, through clarification from the employer, it is determined that only a $.30 increase is actually anticipated and any other amount is based on performance, use $.30 when calculating anticipated income. HUD Handbook 4350.3 states that current circumstances should be used for project income.
Lump sums are generally counted as assets and not as income. In this situation, the SSI lump sum should be counted as an asset. Chapter 5 of the HUD 4350.3 outlines how to treat such payments.
No. A project is not required to use the Under $5,000 Asset Certification form when a resident's total assets are less than $5,000. The project may elect to verify assets through a third party. However, if a project chooses to use the Under $5,000 Asset Certification, the OHFA form posted on the OHFA web site must be used.
The periodic payment should be counted as income. An imputed calculation of income based on the balance of the account is not necessary. See Change 2 to the HUD Handbook 4350.3 for additional information.
Financial aid in the form of a loan should not be counted as income. Beyond loans, financial aid in excess of tuition and books should be counted as income, unless the student is over age 23 with a dependent child, or the student is living with a parent(s) who is receiving Section 8 assistance.
Rental property will require two calculations. First, the value of the asset will need to be determined. This can be determined based on a verification obtained from a real estate agent, or by gathering information about the property from the respective county auditor web site. Any costs associated with converting the asset into cash may be deducted from the Fair Market Value to determine the cash value. Examples of these costs may be outstanding mortgages, realtor commissions and/or closing costs. If the property is being rented, the rental income should be counted as income generated from the asset. There are costs associated with maintaining a rental property that can be deducted from the rental income received. These costs include, but are not limited to, mortgage interest, property taxes and repair costs. OHFA suggests asking the resident/applicant for a copy of Schedule C or Schedule E from their latest tax return. This will show the amount of income they reported to the IRS for tax purposes.
SSI benefits verifications must be no older than 120 days, since benefits can change as the household’s situation changes; for example, if there are earnings from employment.
An owner may pursue the remedies outlined in the lease. Owners should carefully consider program requirements when preparing a lease to ensure all resident and owner responsibilities are appropriately addressed. The Section 42 Lease addendums located on the OHFA web site contain language addressing the household's need to recertify in order to uphold their lease.
An owner may choose to have a resident complete a TIC. Projects with a recertification waiver are not obligated to certify resident income, after move-in, to remain in compliance with the tax credit program. However, other programs, such as the HOME Program, may require a TIC.
Proper recordkeeping is critical to ensuring a tax credit project can continue to remain in compliance. Owners have some business decisions to make regarding how long files are retained after the end of the compliance period. In addition, the owner must decide how the files will be stored.
In general, it is advisable to retain all files for the entire compliance period. After the compliance period, at a minimum, all first year files should be retained for the extended use period or six years, whichever is greater.
Project files may be retained at a location other than the project, but all files must be available to the IRS and OHFA for review. Thus, choosing a safe and accessible location is important.
To save space, and for enhanced security, files can be stored in a digital format. IRS Revenue Procedure 98-25 outlines IRS requirements for digital storage. A copy of the Revenue Procedure can be found on OHFA's web site.
OHFA does not have a specific requirement. The owner should be sure to abide by any applicable Ohio landlord-tenant law.
There are several reasons the TIC is required. First, the Internal Revenue Code requires the owner of a tax credit community to obtain from residents a tenant income certification. The SIAS is simply an information gathering tool. Second, the TIC must be prepared and signed because the income calculation is made after the resident manager has third-party verified the income and assets of the household. Unfortunately, owners and managers cannot rely solely upon the information disclosed by the resident to determine income. While executing the TIC requires another visit to the management office by the resident, it is a critical step in the affordable housing process that cannot be avoided.
Only when the individual executing documents on behalf of a resident has a general power of attorney may that person sign for another. A medical power of attorney is not sufficient.
Yes. The SIAS must be completed on-site and signed by all parties on the same day.
Yes. Any question that is answered with a “yes” must be completed fully.
If corrections must be made, place a line through the incorrect information, and then add the correct information. In “lining” through information, it should be done in such a way that the incorrect information is still visible. Do not use correction fluid. Both the resident and manager should initial and date the change to indicate both parties were aware of the change.
Yes. If the unit number is not known until the time of move-in, it can be added at the time the TIC and lease are signed.
Yes. To the greatest extent possible, OHFA uses Rural Development inspections to meet its monitoring obligations. The Agency does reserve the right to conduct inspections of tax credit projects with Rural Development financing as necessary.
The owner should contact its lender to determine which allowance is appropriate. The owner should be sure to take into account the requirements of other funding sources when determining the appropriate utility allowance. OHFA will accept the Rural Development utility allowance.
The Rural Development 538 Program provides a loan guarantee. Unless the project is assisted by other federal subsidies, projects financed using the 538 Program should be able to use the standard LIHTC Lease Addendum.
A tax credit community may establish a minimum income provided;
1. No applicant is rejected simply because they possess a Section 8 voucher; and
2. The minimum income limit is applied to all applicant households and is clearly outlined in the project's tenant selection plan.
The rules for calculating student income under the Section 8 Program apply to all tax credit households, regardless of other programs the household may be using, including a Section 8 Housing Choice Voucher.
No. The TIC does not have to be modified when a household receives a voucher as the voucher is not considered a source of income or an asset.
Units composed entirely of full-time students, regardless of the age of the students, must meet one of the exceptions to the student rule outlined in Section 42.
Yes. The expectant mother should self-certify to the pregnancy, as described in Appendix 3 of the HUD Handbook 4350.3. The unborn child must be listed as a household member on the Tenant Income Certification.
No. An adult pursuing a GED is not considered a full-time student.
The resident is a full-time student if the student is considered a full-time student by the college or university.
The change in the tenant's student status should cure the non-compliance, thus allowing the resident to remain in the unit. The implication for the owner is that credits should not be claimed for the period, beyond the first five months, when the resident was a full-time student. Requesting that the tenant vacate would not protect the credits in this situation.
This is not an unusual situation. Generally, OHFA interprets the exception in the rule to apply to residents who are pregnant. Therefore, this household would not be considered a household composed of full-time students.
Yes. Receipt of a TANF-based benefit is sufficient to meet the student rule exception.
- Loose toilet bases
- Grease around burners on the stove
- Ground Fault Circuit Interrupters (GFCIs) not installed correctly or not functional
- Loose handrails (both interior and exterior)
- Light bulbs missing from stairwells and/or basements
- Torn/broken window blinds
- Junk cars
- Open breaker slots or missing covers on electrical panels
- Basements used as bedrooms
- Missing window screens
- Smoke detectors with missing or chirping batteries
Yes. This is necessary to protect all parties to the lease.
Because the owner must annually certify as to the habitability of the buildings, annual unit inspections are required. The resident is not required to sign any documentation confirming the inspection was completed.
The TIC can be modified to reflect the new unit number or address. The move-in date is the date that the household was initially qualified for the project. The certification date will remain the date the household was last certified.
Per the IRS 8823 Guide, the manager should verify the household’s income does not exceed 140% of the applicable income limit. The verification can be conducted by interview and clarification record, or the household can be asked to complete a Sworn Income and Asset Statement or other similar document.
No. OHFA only approves utility allowances on a project by project basis, or as described in the OHFA utility allowance policy established in December 2006.
|
