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Child Support

Posted on: July 18th, 2019 by Christa Landram No Comments

Child support agreement sitting on desk with pen on top

A few people have expressed confusion regarding how Florida Housing monitors child support; so, I have written a succinct explanation in hopes that it will provide clarification.

If an owner has a court order and a printout from the enforcement agency, the owner is now allowed to use the average payment from the printout, if:

1. The printout is from the actual enforcer (this does not include myflorida.gov); AND

2. There is at least 3 months of history (this can include $0).

If one of the above criteria is not met, then the amount on the court order MUST be used.

As a reminder, the following steps should always be taken:

1. Every household should be asked if there is child support or if child support is due, even if children are not present in the household.

2. A child support affidavit is not required if the file is properly documented with these answered questions:

a. Do you receive child support?

b. Are you entitled to receive child support?

c. At what frequency are you entitled to receive child support?

3. The questions should cover ALL children.

4. The court order in its entirety is recommended; however, if the printout from the enforcement agency clearly shows the amount due to them, the frequency of pay, the contributor, and the children(s) names, then it will not be a discrepancy if the court order is not present. This is an exception and should not be the standard. Most everyone can retrieve their court order, as they are located and accessible in court archive

 

Unit Transfers

Posted on: August 8th, 2018 by Christa Landram 1 Comment

Anyone who participates in the affordable housing industry has dealt with or will deal with a transfer(s) at some point in the affordability period. It is crucial to understand the different rules pertaining to transfers. To help compartmentalize the various rules, we will break it down by funding source.

LIHTC/HC
With LIHTC, the owners must know whether the building is part of a multiple building project or a single building project.
Note – building election can be found on Form 8609, Line 8b.

Each Building is a Project:
Transfer between buildings: If the owner chose each building to be a project, then each building is treated as a separate project. This means that Initial Certifications must precede transfers between buildings or “projects,” and the household requesting a transfer to a different building is treated as a new move-in. This means the household must meet the applicable income limit.

Transfers within the same building – 100% Low-income: households can transfer within the same building without having to test their income because, per IRS regulations, they do not have to conduct recertifications and at initial they were presumably under the applicable income limit.

Transfers within the same building – Mixed Income: transfers can take place within the same building, but income should be “tested” to see if the household exceeds 140%. If the household does exceed 140% of the applicable AMI, then the household can still transfer, but to maintain compliance, the Next Available Unit Rule (NAUR) will need to be invoked.

Multiple Building Project:
100% Low-income: households can transfer within buildings and between buildings without having to test their income because, by IRS regulations, they do not have to conduct recertifications and at initial they were presumably under the applicable income limit. Even though Florida Housing conducts one annual recertification for these projects, they still do not prohibit transfers between buildings, even when a household exceeds 140%.

Mixed-income – transfers within the same building: transfers can take place within the same building, but income should be “tested” to see if the household exceeds 140%. If the household does exceed 140% of the applicable AMI, then the household can still transfer, but to maintain compliance, the NAUR will need to be invoked.

Mixed-Income – transfers between buildings: income must be tested to see if the household exceeds 140% of the applicable AMI. If it does, then the household cannot transfer. If the household does not, then the household is permitted to transfer.

MMRB
NOTE: following is a Florida Housing rule. Please check with your bond issuer to see if they follow the same principles.

When a property is combined with MMRB/SAIL, the HC rule applies. The IRS states that when a property is 100% low-income, annual recertifications do not have to be conducted and transfers can take place without restriction.

When it is not combined with HC, but is still 100% low-income, the same rule applies (see LIHTC/HC rules above).

When a project is not 100% low-income, all transfers must be treated as new move-ins and the entire initial certification process must be completed.

SAIL
The SAIL definition of very low-income indicates that when a property is combined with HC/SAIL, the HC rule applies.

The IRS states that when a property is 100% low-income, annual recertifications do not have to be conducted and transfers can take place without restriction.

When it is not combined with HC, but still 100% low-income, the same rule applies (see LIHTC HC rules above).

When a project is not 100%, all transfers must be treated as new move-ins and the entire initial certification process must be completed.

HOME
Under HOME, the transfer rule is slightly ambiguous, and it is important to inquire how to do all transfers with the PJ (Participating Jurisdiction) or the Program Administrator. Many administrators require the household to be treated as a new move-in before conducting the transfer. Transfers are often done at lease renewal. To accommodate appropriate occupancy, an owner should complete the entire certification process to ensure the current household and associated income has been captured. At all times, the unit mix must be maintained.

 

COMPLIANCE: ACQUISITION/REHAB vs. RE-SYNDICATION

Posted on: July 20th, 2018 by Christa Landram No Comments

Recently, the affordable housing industry has seen a surge in acquisition/rehab deals. It is important to know the difference between a straight acquisition/rehab property and a re-syndication.

Straight Acquisition/Rehab

A property that was not a previous LIHTC property but received tax credits or both tax credits and bonds. Each renter is treated like a new move-in since they were not previously qualified.

Re-syndication

Re-syndication is when a project has been through its first 15-year compliance period, and the owner (original or new) elects to apply for a new set of credits. This election will restart their 10-year credit and 15-year compliance period. The property has already been a tax credit property and the owner is placing new credits into service with existing LIHTC residents in place, some of them having lived there for years.

One of the most common questions we receive is, “Can a household be ‘grandfathered’ into the program without having to undergo a new income certification (IC)?”

Under re-syndication with just LIHTCs, it is a possibility. If an owner can demonstrate with a good Tenant Income Certification (TIC), including strong documentation, that they were qualified for the LIHTC program, they are considered qualified at re-syndication. This is up to the owner and the limited partner (investor), as some investors will only participate if all households are initially qualified. An owner has 120 days to initially certify all households, or show all households are certified as of the last certification. Once the 120 days are up, households can continue to be qualified, but they must be treated like a new move-in.

When layered with bonds, all households MUST be initially qualified, and an owner has a year, as of the close of the bonds, to show that these residents are qualified under the bond program. After the one-year deadline, any households that do not qualify will be considered in noncompliance if the property is 100% bond. If it is not 100% bond, the unit must be listed and considered Market Rate. It is a federal rule that the owner of these projects ensures they have bond-eligible households in place within one year of closing.

If a resident was initially certified just before the acquisition and the income verifications are still within 120 days, then the owner can use the same verification, but a new TIC must be completed and signed by the owner and adult household members.

Note: if there is a change of ownership, being “grandfathered” in is only an option for those acquisition/rehab projects under re-syndication. If it is a straight acquisition/rehab (prior to the completion of the 15-year compliance period) and there is a change of ownership, then all households must be initially qualified.

TYPE OF ACQ/REHAB                INITIALLY CERTIFY              COULD BE “GRANDFATHERED IN”
___________________________________________________________________________________
Straight Acq/Rehab without
BONDs (not a previous LIHTC                    X
property)
___________________________________________________________________________________
Re-syndication (post 15-year
compliance period) without                                                                                 X
BONDs
___________________________________________________________________________________
Still within the initial Compliance
Period                                                     X
___________________________________________________________________________________
Has BONDs                                            X
___________________________________________________________________________________

Another common question we receive is, “How do verifications work when qualifying households under acquisition/rehab with the effective date being the acquisition (purchase) date?”  Verifications are good for 120 days from the date of owner’s receipt.  If a verification is obtained prior to 120 days before an effective day on the TIC, it wouldn’t be valid as of the effective date even if the resident signed the TIC early.  Looking at an example:

•    Assume a verification document is obtained in March
•    You have the tenant sign the TIC in June (within 120 days)
•    But the effective date will be in December (200+ days after the verification)
•    You have an expired verification document that will not be sufficient or valid for a December effective date

Verifications need to be within 120 days of purchase date. The whole process (verifications and TICs completed/signed) would all need to be complete within 120 after purchase/acquisition (effective date) to be able to use the purchase date as the effective date. Otherwise, the completion of paperwork/process isn’t done in time and the effective date doesn’t revert to purchase date but becomes the date the TIC is completed/signed.

Many also wonder if the move-in date is when the household moved in or the date the unit became LIHTC certified?

As of now, there is no clear guidance on this for acquisition/rehab deals. Most state agencies will not make an issue over whether an owner chooses to use the original move-in date or the effective date of the certification as the move-in date. This is one of those areas that is grey from a federal standpoint. It is still very important to check with your state agency to see if they have a preference

The income limits that should be used may be initially confusing to these deals. If it is an LIHTC only acquisition/rehab, the income limits may vary. When using old certifications, there may be several. The limits that will be used for old certifications will be the ones in effect at time of their certification. All other households will use the current income limits in effect at time of acquisition. These limits can be used for 120 days after date of acquisition, even if the new limits come out. Once the 120 days has expired, the current income limits will be used.

For LIHTC/Bond or just Bond, the income limits will be based on the limits in effect at time of acquisition. These limits will be used until the next set of income limits has been received (or posted). LIHTC and Bond properties are held harmless from income limit (and therefore rent) reductions. These properties will use the highest income limits used for resident qualification purposes since the project has been in service. Once the new set of limits are known, an owner compares these newly posted limits to the previous year’s limits, to determine which one is higher and which one they will use.

Finally, why are there times when the year of the rent limits do not coincide with the income limits? The IRS allows owners of LIHTC developments to select a gross rent floor (GRF) election for every building in a project, based on when credits were first allocated to that building or the date the building was first placed-in-service. The GRF election is a rent revenue security blanket for the owners so that they do not have to reduce rent limits any lower than the rent limits in place at the time credits were allocated or at the placed-in-service date.

If the Owner elects their GRF to be at allocation, the rents will be based on when a state agency representative executes the Carryover Allocation. If a property does not have a Carryover Allocation, it is the date the Preliminary Determination page is signed by a state allocating representative.

Looking at an example:
•    Property allocated credits in 2015 with median income limit of $50,000
•    Property placed in service in 2016 with median income limit of $45,000
•    GRF is based on the median limit of $50,000
•    2017 the median income limit is $42,000
•    2018 the median income limit is $43,000

In 2018, the income limits will be based on the Placed in Service (PIS) median limit of $45,000 and the rent limits will be based on the GRF election (2015) when the median income limit was $50,000.

As always, it is important to verify all procedures with your state allocating agency prior to implementing any new rules or regulations.

Don’t know why you keep getting turned down for Government jobs?

Posted on: April 15th, 2016 by Tiffany Royall No Comments

Within each state and county, rent limits vary.  Families that cannot afford market value rent are looking for affordable housing.  Annually, HUD issues what is known as an Income Limit chart to determine household eligibility for affordable housing.  But do you know what other program uses this information?  Section 3 uses the Uniform Act Income Limits to qualify workers and businesses.  All agencies who receive federal funding are required, every year, to meet Section 3 plan objectives.  If you’re not getting your bids accepted, Section 3 could be the reason.
HUD’s Income limits PDF link is below for easy access.

https://www.huduser.gov/datasets/ura/ura16/IncomeLimits-URA-FY16.pdf

Is your business Section 3 certified? Are you unsure if you can become Section 3 certified?  Are at least 30% of your workforce at or below the income limits?

As an example, if you are in Fort Lauderdale the income limits are as shown below:

1 Person              2 Person              3 Person              4 Person              5 Person              6 Person
$40,600                $46,400              $52,200                $58,000               $62,650                $67,300

If you employ a worker who is single, with no dependents, who makes $19.51 an hour or less, they are considered a qualified Section 3 worker.

If you have 15 workers, only 5 of them need to be Section 3 Certified Workers for you to qualify as a Section 3 Certified Business.

Contact us at loanadmin@firsthousingfl.com to help answer your questions and get you pointed in the right direction.

If you want to start winning more bids, this could be your answer.

 

Florida Building Code Update

Posted on: April 5th, 2016 by Tiffany Royall No Comments

The building code of Florida is being updated.  Some of the changes you will see are going to be Accessibility, Code Administration, Electrical, Energy, Fire, Mechanical, Plumbing, Roofing, Special Occupancy, Structural and Swimming Pools.  According to Floridabuilding.org, “The Florida Building Code should not exclude any code section which is in the base code, even if some may think a code section is not application in Florida, such as a Snow Load.” If something is not applicable for a project, then it’s not enforced, but will not be removed from the Code Section.

A structural change is going to be a challenge in some regions of Florida.  “The State of Florida is the only state of the contiguous states where the entire land mass is a hurricane prone region.  Florida has endured numerous land falls form hurricanes and special attention is merited for the installation of hurricane protection.” (floridabuilding.org)  Certain high rise buildings will need to ensure they have the property safety routes in case a hurricane comes through and takes out several stories of a 15 story high rise. These building code changes are not just for the State to say they have updated their codes, but for the safety of everyone living in or around a building.  The State of Florida is surrounded by water, and 19 million people live here; so they need to be concerned about safety and the public’s well-being.

As a Floridian, I want to preserve the natural beauty of the land around us.  We have gorgeous oceans, lakes, and ponds that serve more than just recreational needs. This is where some plumbing code changes will benefit the state now and in the future.  We have a wealth of springs, wetlands, rivers, and lakes all around us, but how will we preserve them as recreational enjoyment and a water supply?  Adopt high efficiency flow rate for all plumbing fixtures.  This is not going to be an easy change, but it will be a worthy investment.  Changing how much water we flush each time, how much water we use when the dishwasher runs, the lower amount of water to wash those 3 loads of laundry per week, will all add up in each household to a savings.  We are a growing state and our water supply is going to be the first demand we see rise.

“Domestic consumption of publicly supplied water is one of the largest uses of water.  Florida is currently the only state in the nation to face water supply challenges” (floridabuilding.org). “The proposed efficiency measures can reduce deficits of future increased demand.  As a result of this proposed modification, a direct impact in reducing demand and ensuring the long-term sustainability of Florida’s water resource can be had without significant sacrifice by any party. This change would provide a foundation for further improvements of water use efficiency at a statewide level” (floridabuilding.org).
Several counties in Florida, including Miami-Dade, have already adopted a similar method.  Building Codes are more than just putting a building up, people live there for years, and then they sell it to a buyer for a higher price.  Building Codes are enforced to regulate the State, save energy and water, and protect the safety of all who live here.

“Governor Scott signed a Florida Building Code on March 25, 2016.  The changes that he has made in this new update include:

    Increased the building’s or dwelling unit’s maximum tested air leakage measure from ‘not exceeding 5 air changes per hour’ to ‘not exceeding 7 air changes per hour’ in all of Florida.

    The minimum fire separation distance for non-fire resistant rated exterior walls shall be 3 feet or greater and non-fire resistant rated projections shall have a minimum fire separation distance of 3 feet or greater.  Projections within 2 feet and less than 3 feet shall include 1-hour fire-resistance rate on the underside.  Projections less than 2 feet are not permitted.

    Mandatory blower door testing for all residential buildings or dwellings units.

    A restaurant, cafeteria, or similar dining facility, including an associated commercial kitchen, is required to have sprinklers only if it has a fire area occupancy load of 200 patrons or more”(floridagreenbuildingcoalition.com)

Resources:
Florida Building. www.floridabuilding.org. 2016
Florida Green Building Coalition.  www.floridagreencoalition.com.  2016

 

The Dreaded Word – Noncompliance!

Posted on: April 9th, 2014 by Bridget Tracy No Comments

I want to talk about that bad, bad word that makes everyone cringe: NON-COMPLIANCE. You all hate to hear it, and we hate to write it up!
Let me share some recent issues I’ve encountered on my audits. Maybe someone else’s pain can help you avoid the same in the future. I’m a true believer that we learn from our own mistakes.  So let’s see if we can learn from others as well!
The place to start is your property’s legal documents, Land Use Restriction Agreements or Extended Use Agreements, and any amendments that may have been filed as well. You need to be well aware of all the requirements that were chosen for your property. Not knowing can easily put you into non-compliance.
For instance: Does your property have a programmable thermostat requirement for its units? I recently had a property put into non-compliance due to this very issue. Programmable versions were being replaced with non-programmable versions. This caused the property to be placed into non-compliance.
Or you may have a site requirement of three permanent picnic tables, but for some reason there are only two the day of your audit. You guessed it – Non Compliance!
Your property documents are also where you will find whether or not your property has a requirement to provide tenant programs and services to its residents. These requirements can be very specific or very vague.  One of the most common non-compliance issues pertaining to tenant programs and services is quarterly requirements. Quarters are calculated by calendar year, i.e.: Jan-Mar, Apr-Jun, etc.  Not providing a service in each quarter will put you into non-compliance.
Or your property may have a Healthcare requirement to provide blood pressure screening, vision and hearing testing. Only providing two out of the three will throw you into non-compliance as well.
I hope you will find these to be helpful tips. Knowing what your documents require is an easy way to avoid the dreaded bad, bad word! Good luck everyone, here’s to your next CLEAN, NO RESPONSE review!

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