In what has become an annual ritual for many of us in the affordable housing industry, I joined state housing finance agency staff, consultants, investors, and other stakeholders in Washington, DC last month for the National Council of State Housing Agencies’ HFA Institute. While there was much buzz about the new administration and questions about its intentions regarding federal affordable housing programs, there was also plenty of discussion about other issues facing our industry. Here’s my run-down:
HOME and Housing Trust Fund (HTF)
- HUD’s stance is that HOME is well-positioned going into the new administration because of its flexibility to be anything that is needed – for homeownership, rental or tenant-based rental assistance.
- Mention of HOME Utility Allowance provision update from August 2016 – HOMEfires Vol.13, No. 2 … PHA UAs no longer permitted for HOME-funded properties per 2013 Final Rule but may remain in use at sites funded before August 23, 2013 … New requirement is for either HUD Utility Schedule Model or other project-specific methodology.
- Upcoming HOME guidance will address Written Agreements … HUD CPD believes many Written Agreements are too weak and not descriptive enough.
- Housing Trust Fund also covered in HOME sessions … Lots of similarities with one major difference being deeper income targeting – most HTF funding committed to Extremely Low Income (ELI) households … Funds may be used for acquisition/rehab, new construction, or first-time homebuyer assistance … HTF proving to be another source of gap funding in most instances … Most states are only getting $3M … 30-year affordability … May use with Public Housing, whereas HOME may not.
- HUD’s new VAWA requirements are applicable to both HOME and HTF.
- The word from Washington: “The game has changed” with the new administration coming in … It is fairly certain that we can expect the long-awaited tax reform … Hopes are still riding on passage of Cantwell/Hatch bill introduced last year for housing credit improvement … NCSHA has had positive communication with new HUD Secretary, Ben Carson, and are hopeful of his support for existing programs including LIHTC.
- Compliance hot topics:
- Compliance monitoring update from Rev Proc 2016-15: Some states requesting from IRS that min 20% auditing requirement be for whole property as opposed to aligning with the multiple-building election.
- Expect income limits publication from HUD again in March; waiting again for release of federal poverty guidelines for ELI. No statutory requirement for the timing of their release.
- Demographic data collected (from HERA provision in 2008) from LIHTC sites and published by HUD are mostly being used by journalists and fair housing advocates.
- HUD-related LIHTC issues to include:
- Arrest Record guidance
- New HUD rule not applicable to LIHTC but provides a good model
- Applies but isn’t regulatory for LIHTC
- Some state agencies are proactive with their own VAWA guidance, but no obligation to do so
- HOTMA (Housing Opportunities Through Modernization Act)
- Numerous provisions affecting HUD programs and possibly LIHTC
- Awaiting HUD guidance before any changes are implemented
- The LIHTC Compliance Forum was focused on:
- Owners and management’s relationships with Housing Finance Agencies to include readily accessible information on HFA websites, up-to-date compliance manuals, clarity on reporting requirements, state-specific training, email blasts/listserves, technical assistance provided in writing, ability to dialog.
- Fraudulent creation of paystubs for income verification! Careful review can help detect discrepancies, e.g. incorrect YTD amounts, total deductions that don’t change, etc. Websites that enable the quick creation of these and evidence that they are being used at affordable sites. Be careful!
- Other sessions focused on Fair Housing, noting that some state agencies are requiring Section 504 for LIHTC even though it’s not required at the federal level; Physical Inspections; RAD; and Blending with Section 8 and other programs.