• Getting LIHTC and HOME to play nice. • Visit eNews to view past editions of Compliance Corner.

Changes in Public Housing spark interest in NCHM's asset management training

By Mark S. Alper, RHM, vice president of Compliance

An interesting trend has emerged over the past 12 to 18 months. We've seen a marked increase in registrations for our Certified Occupancy Specialist for Public Housing (COS-P) training, as well as in our comprehensive designation, Registered Housing Manager (RHM).

Created by the US Housing Act of 1937, public housing is, of course, the nation's oldest federally assisted housing program. It has also been the focus of top-down compliance requirements such as PHMAP and its successors. HUD even engaged the Harvard University Graduate School of Design to answer the question, “How much should it cost to run a well-managed PHA?"

One of the outcomes of that study was a recommendation that HUD regulations impacting public housing operations be made more consistent with HUD Handbook 4350.3, used by the privately-owned, project-based HUD assisted programs. The study also recommended that PHAs transition to asset management.

This might explain why we've seen an increase in interest in COS-P. We are naturally delighted, and are able to provide PHAs with the same full range of training, consulting and services that private owners have availed themselves of for over 37 years.

Getting LIHTC and HOME to play nice

By Jo Ikelheimer, MPA, RHM

Did you know that approximately seventy percent of Low-Income Housing Tax Credit (LIHTC) properties also have HOME funding? I recently heard this statistic quoted by an industry expert and it led me to wonder how many of our customers are managing properties that feature both LIHTC and HOME assistance. And how many of those with NCHM's Tax Credit Specialist (TCS) certification, I wondered, know the HOME program requirements and are confident in their ability to manage compliance for both programs?

For a little history lesson, HOME was initially funded by HUD in 1992 and the HOME Rule is found in 24 CFR Part 92. The program is designed to increase the supply of affordable housing for a sustainable period by capping rents at affordable levels and restricting occupancy to Low and Very-Low households. It's funded through Participating Jurisdictions (PJs) which are units of state and local government that receive annual block grants of Federal HOME funds from HUD. The PJs then award HOME funding, either through grant or loan, to develop affordable properties. So, the goals of the program are much the same as those of LIHTC.

The two programs blend together quite nicely, as well, since they are both geared toward income qualification being the primary component of eligibility. LIHTC targets households at fifty and sixty percent of Area Median Income and HOME targets Low (80% AMI) and Very-Low (50% AMI) households for eligibility, so there is a slight discrepancy there which is usually easy enough to manage. One of the trickier aspects of maintaining compliance between the two is when it comes to rents, however. When a Very-low HOME renter, paying Low HOME rent, becomes over-income at recertification, you may have to charge them High HOME rent in order to stay in compliance with the HOME regulations. Then what happens when the High HOME rent exceeds the gross rent limit for LIHTC?

The question of recertification can also be problematic when blending these two programs, especially in light of the fairly recent HERA provision that no longer requires annual tenant income certification at 100% LIHTC properties. HOME has maintained its annual recertification requirement, so how does the discrepancy between the two programs work?

NCHM advises that when program regulations conflict, managers should always comply with the regulation that is the most restrictive. Sometimes this will be obvious, such as with annual recertification requirements, but sometimes it is not so obvious. And when managing multiple subsidies at one site, which is also a possibility, it can become even more obscure.

So, what is a manager to do? For starters, take a look at our latest compliance offering, Blended Occupancy Specialist (BOS), has the answers for you when it comes to managing layered properties. It provides thorough review of program differences between LIHTC, HUD project-based programs, and HOME. Most importantly, the goal of the course is give you all the tools to develop a personal compliance and management matrix in order to establish good compliance strategies and maintain compliance at your blended sites. BOS classes are being offered beginning in April, so check out the schedule and register today!