Fair Housing Pointers for LIHTC
Perusing over my archived HMU articles from the past few years, I found that usually, in the fair month of June, I write about highlights from the National Council of State Housing Agencies (NCSHA)’s annual Housing Credit Conference. This year, with the conference not until the last week of the month, I am going to be mixing it up a little and touching upon an issue that I haven’t written about before in this forum: fair housing laws as applied to the Low-Income Housing Tax Credit Program. (I will also be speaking on this topic at the upcoming conference, in case any of you will be in attendance.)
Starting with the basics, LIHTC practitioners should know that for “stand alone” tax credit properties, only two out of the three federal fair housing laws apply. These are the Fair Housing Act as amended in 1988 (CFR Part 8) and the Americans with Disabilities Act (ADA). If, however, the tax credit property is blended with another program that has federal assistance then Section 504 of the Rehabilitation Act of 1973 (CFR Part 100 Et Seq) is also applicable. So if you are managing a tax credit property blended with HUD project-based assistance, it is pretty obvious that Section 504 applies. One cautionary note, however, is that the HOME Program, which is blended with around forty-percent of LIHTC properties, is also considered to be a federal assistance program. Please take heed if your property falls into that category.
Another thing that I would like to point out for LIHTC is HUD’s Final Rule on equal access to HUD programs regardless of sexual orientation or gender identity, which was published earlier this year. I have had several students in recent classes confuse this with a new protected class under the Fair Housing Act, which it is not! This is considered to be a new HUD program rule, but not an amendment to the Fair Housing Act. It is applicable to all HUD programs, however, so again if your tax credit property has HOME and/or project-based HUD assistance then it will be worth your while to review the particulars of this Final Rule.
On a closing note, I would also like to remind all LIHTC managers that the Section 42 regulations were amended back in 2001 to include the provision that adverse judgments found against owners of housing credit properties for purposes of fair housing violations are considered to be a reportable noncompliance issue to the IRS and can result in recaptured credits. So, even if your tenant files are in perfect order and the physical condition of your units and site is pristine, you may find yourself in trouble if this happens at your property.
The solution? This is mostly determined on a case by case basis and in reality most fair housing cases are resolved through settlement, but there are a couple of measures that can go a long way toward preventing fair housing issues at any property, LIHTC or otherwise. Owners and managers should attend comprehensive, site-specific fair housing training and there is no replacement for consulting with a capable fair housing attorney if you suspect there may be a problem. NCHM can help you out with the first measure by offering either our Fair Housing Essentials or Fair Housing Roundtable courses to your company. We strongly recommend that you arm yourselves with this knowledge to keep your LIHTC properties fully in compliance.