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Feel the burn of fitness compliance
By Mark S. Alper, RHM, vice president of compliance
As hopefully all of you know by now, NCHM has recently inaugurated its COS Advanced (COSA) two-day training program. I'll be co-training most or all of the initial offerings and the first two programs have already been delivered.
Since HUD has been rather quiet over the holidays, I thought I would share with you one of the things I have come to understand through these first programs and, more broadly, from other compliance training programs I have been involved in training over the past year. Specifically, the need to keep our compliance fitness in shape through exercise.
I am not suggesting that anyone get on a treadmill or stairmaster holding a HUD Handbook 4350.3, Rev. 1, although I do believe the thing weighs a few pounds. I am focusing on mental exercise. Or as Hercule Poirot, the fictional Belgian detective created by Agatha Christie would say, "Exercise of the little gray cells."
I studied French, Spanish and Russian during my days as a high school and college student. I remember bits and pieces of those languages but, frankly, have forgotten more than I remember. The reason why, I think, is that I didn't use those languages on a regular basis. The old adage comes to mind: "If you don't use it, you lose it." That's true in everything except certain addictive substances.
COS is a vital training program, and I felt that way about it before I joined the NCHM staff. But if you stop using that knowledge base, and/or the HUD Handbook 4350.3, Rev. 1 remains untouched on your shelf for so long that it would take an archeological expedition to unearth it, the knowledge is only going to be retained for so long. Because, in the final analysis, knowledge is only one part of the equation. The other part is accurate, efficient and effective implementation of compliance rules, and that's often where I find the "disconnect" in a housing management organization.
Effective implementation means you have to stay in compliance "shape." Get rusty or flabby, and you'll see the results, which will thrill you about as much as realizing that your waistline exceeds the number HUD considers "elderly" in terms of age. It's one of the reasons NCHM has established Continuing Education requirements for our COS Masters designation, for which COS Advanced is a requisite.
So, I'll close with a suggestion. Pick at least two topics in compliance; one that is relatively familiar to you, and the other that is decidedly outside your comfort zone at the moment. Work both those issues. Write some actual or hypothetical situations, and work that until you're comfortable with the answer. Ask yourself how those points could be implemented within your organization, or could be implemented better. Do this on a regular basis.
Most of us are aware of the importance of physical fitness. There are books, videos, television programs and advertising. Not enough emphasis is placed on keeping our minds in tip-top shape, and that is absolutely indispensible in the field of compliance.
LIHTC at risk despite signs of health
By Jo Ikelheimer, MPA, RHM
"It was the best of times, it was the worst of times."
Dickens's famous opening lines to A Tale of Two Cities could have been the unofficial theme of the National Council of State Housing Agencies' (NCSHA) annual Housing Finance Agency Institute in Washington, DC earlier this month. Several industry experts stated in the conferences' Opening Plenary that the Low Income Housing Tax Credit (LIHTC) program is facing the gravest threat in its 25-year history: impending tax reform at the federal level. The fear is that the LIHTC program will be jettisoned to achieve a lower corporate tax rate when reform eventually passes Congress. This should be a call to arms for all industry stakeholders to contact their representatives in Washington to lobby for the program's survival!
So that's the worst-of-times part. The best-of-times part is that, due to better underwriting standards, LIHTC properties are now performing better than they have in years. Developers are looking more closely at market demand and the strength of management companies before bringing their deals to the state agencies. This increased scrutiny and care in developing properties is helping to strengthen the equity market, which means that the program remains attractive to investors. Hopefully this better performance will help make a strong case for legislators not to sunset LIHTC.
On a more specific level, there were a couple of other items addressed at the workshops worth noting. First off, the report on the Federal Alignment initiatives was positive in that the two pilot programs for aligning physical inspections and subsidy layering reviews appear to be going well. Since they will be running for a year, we won't know final results until sometime next year, but baby steps are better than none at all so we can hope for a positive outcome and more lasting alignment arrangements between agencies to follow.
The other topic, which turned into an interesting discussion among the state agencies, was NCSHA's plan to revamp its Recommended Practices in Compliance Monitoring for LIHTC. Since the IRS proposed last summer that it may reopen that section of the regulations for review but has yet to do so, the National Council is taking a wait-and-see approach to its efforts to update the Recommended Practices. In the meantime, several states offered that they are considering going to a risk-based model of monitoring, which would mimic HUD's methodology more closely and reward properties that are maintaining high levels of compliance by not monitoring them as frequently. Obviously the flip side of this would be that those under-performing properties would be reviewed more closely, more often. That, of course, will be a big change for the program if it comes to pass so we will look forward to hearing more about those ideas later in the year.
