Combined Funding. About the Presenter. REMEMBER You are working with two separate programs, sometimes you have navigate down two different paths

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Heather Staggs, CPO, FHC, SHCM Combined Funding Copyright 2015 S.T.A.R. Momentum Training and Consulting, LLC Not for duplication or distribution without prior consent.

Formerly with the Colorado Housing and Finance Authority (CHFA) and, prior to that, the U.S.

Staggs possesses the real-world, hands-on knowledge of applying the rules of the trade.

1 Heather Staggs, CPO, FHC, SHCM Combined Funding Copyright 2015 S.T.A.R. Momentum Training and Consulting, LLC Not for duplication or distribution without prior consent. Heather Staggs, SHCM, CPO, FHC AHM, HCCP About the Presenter Ms. Staggs brings knowledge from both sides of the aisle. Formerly with the Colorado Housing and Finance Authority (CHFA) and, prior to that, the U.S. Department of Housing and Urban Development, she is an expert in compliance with low-income housing laws and regulations. As a long-time property manager, Ms. Staggs possesses the real-world, hands-on knowledge of applying the rules of the trade. Her experience includes: More than 20 years of property management experience with deep knowledge of multifamily programs and regulations, including: Project Based, Low Income Housing, FDIC Affordable Housing Program, and FHA and Non-FHA Loan products Former Manager of, and Multifamily Program Compliance and Asset Management Officer with Colorado Housing and Finance Authority (CHFA) Former Project Manager with the U.S. Department of Housing and Urban Development Former Sr. Director of Property Management Attended the University of Denver s Executive Leadership Program Rocky AHMA s Contract Administration Special Recognition Award for Commitment to Excellence in Affordable Housing in 2011 Recipient of a Special Recognition Award from the Denver HUD Office 2012 REMEMBER You are working with two separate programs, sometimes you have navigate down two different paths A TAX CREDIT PATH A SECTION 8 PATH 1

are issued to fund loans for the acquisition, construction, rehabilitation and refinancing of

2 Additional Program Layering Tax Exempt Bond Financing Below Interest Rate Loans HOME Project Based Section 202/811 Moderate Rehabilitation HOPE VI Tax Exempt Bond Financing Tax-exempt bonds are issued to fund loans for the acquisition, construction, rehabilitation and refinancing of properties A lot of the same rules as the LIHTC program follows section 142(d) of the IRS code Path 2

3 History The program is often referred to as: Section 42 LIHTC LIHC Housing Credit Program Partners IRS State Agency Owner/Developer Syndicator Investor Management Company On-site Staff IRS HFA 3

Path Program History The Program was authorized by Congress in 1974 and developed by HUD to provide rental subsidies for eligible tenant families (including single

4 Path Program History The Program was authorized by Congress in 1974 and developed by HUD to provide rental subsidies for eligible tenant families (including single persons) residing in newly constructed, rehabilitated and existing rental communities Program Partners HUD Contract Administrator Owner/Developer Management Company On-site Staff 4

5 Both Programs Differences Between Programs The two different paths Path The Section Path Verifications 5

6 Verification Methods 6

7 Page 5-54 Methods of Verification Chapter 5-13, A. -Methods of Verification Acceptable methods of verification, in order of acceptability: 1) upfront-income verification (UIV) with use of EIV being mandatory and use of non-eiv UIV being optional; 2) third-party verification from source (written), 3) third-party verification from source (oral), and 4) family certification B. 1. a., Page 5-54 Methods of Verification Third-Party Verification Change in order of acceptability Upfront-income verification (UIV) UIV is verification of income before or during a certification and/or recertification, through an independent source that systematically and uniformly maintains income information in a computerized form. EIV System The Work Number Advanced HR Solutions Experian Social Security Administration (SSA) Form 7004 Internal Revenue Service (IRS) Form 4506-T Internal Revenue Service (IRS) Form B. 1. a., Page 5-54 Methods of Verification Third-Party Verification Upfront-income verification (UIV) (1) Using HUD s EIV system for tenants (not available for applicants). (Mandatory) It is mandatory that owners use the EIV system as the third-party source to verify employment and income information of tenants during recertification (annual and interim) of family composition and income. 7

8 5-13 B. 1. a., Page 5-54 Methods of Verification Third-Party Verification Upfront-income verification (UIV) (2) UIV using non-eiv system (Optional) (a) Owners may use other non-hud UIV tools such as The Work Number and other state government databases, if available, to verify income: (1) Of applicants; (2) When no employment or income is available in EIV; or (3) For other types of income received by the family. Page 5-55 & 5-56 Methods of Verification 5-13 Paragraph has been re-written to include 1. (a) Upfront-income verification (UIV) 1. (b) Third-party verification from source (written) 1. (c)third-party verification from source (oral) 1. (d) Family Certification 2. Electronic Verification Page 5-61 Methods of Verification Original tenant provided documents must be returned to tenant to paragraph 5-18,D. 8

9 Method of Verification Third Party Verification: ~ Written and received directly from source~ Applicant must sign release Applicant should not handle verification form Method of Verification Document Verification: Birth date Adoption papers Divorce decree Pay stubs 4-6 current consecutive 6 months is recommended Method of Verification First-hand Verification: Notarized statements or signed affidavits by applicant Self-employed income, unemployed status, zero income, recurring gifts, cash NOT held in a Bank Account. 9

10 Documenting Why Third-Party Verification Is Not Available When third-party verification is not available, you must document in the file the efforts made to obtain the required 3 rd party verification and the reason the verification was not obtained by: A written note to the file explaining why third-party verification is not possible A copy of the date-stamped original request that was sent to the third party Written notes or documentation indicating follow-up efforts to reach the third party to obtain verification Written notes to the file indicating how long the request has been outstanding without a response from the third party. Clarification Records When clarifying information by phone, you must record and include in the tenant s file the following information: Your name Date and time of the telephone call. The name of the person you spoke to, their position and contact information Questions asked of the third party Information/answers given by the third party 10

11 120-Day Life of a Verification Authorization to Obtain Info Unit is the Only Residence 11

12 Citizenship Screening for Drug Abuse Required Lease 12

13 Modifications to the Lease Attachments to the Lease Length of Lease Term 13

14 Security Deposits Certification Forms TENANT INCOME CERTIFICATION 14

on the 50059 at move-in The TIC should be completed by management not the resident Do not forget to complete the second page and answer all of the questions 50059 and TIC

15 Tenant Income Certifications Fill the TIC out in it s entirety. It is just as important to have the TIC completed correctly just as it is for the Ensure that the effective dates are correct The effective dates should match the dates on the at move-in The TIC should be completed by management not the resident Do not forget to complete the second page and answer all of the questions and TIC Effective Dates The effective date should be the date of movein or the 1 st day of the same month in subsequent years. If a TIC is completed make sure that the effective dates match the effective dates on the The TIC and need to be signed on or before the effective date. HUD

16 Signing Certifications of Income Figure 5-5 on Page 5-59 Figure 5-5 on Page 5-59 The following statement must appear on all consent forms developed by owners: Title 18, Section 1001 of the U.S. Code states that a person is guilty of a felony for knowingly and willingly making false or fraudulent statements to any department of the United States Government. HUD and any owner (or any employee of HUD or the owner) may be subject to penalties for unauthorized disclosures or improper uses of information collected based on the consent form. Use of the information collected based on this verification form is restricted to the purposes cited above. Any person who knowingly or willingly requests, obtains or participant may be subject to a misdemeanor and fined not more than $5,000. Any applicant or participant affected by negligent disclosure of information may bring civil action for damages and seek other relief, as may be appropriate, against the officer or employee of HUD or the owner responsible for the unauthorized disclosure or improper use. Penalty provisions for misusing the social security number are contained in the Social Security Act at **208 (a) (6), (7) and (8).** Violation of these provisions are cited as violations of 42 U.S.C. Section 408 (a) (6), (7) and (8). 16

17 Max Rents Gross Rents Calculating Income Ranges 17

18 THIS SECTION TO BE COMPLETED BY EMPLOYER Employee Name: Amanda Smith Job Title: Sales Associate Presently Employed: Yes x Date First Employed 12/31/2014 No Last Day of Employment Current Wages/Salary: $9.50 (circle one) hourly weekly bi-weekly semi-monthly monthly yearly other Average # of regular hours per week: Year-to-date earnings: $6, through 04/30/2015 Overtime Rate: $14.25 per hour Average # of overtime hours per week: 3-6 Shift Differential Rate: $ n/a per hour Average # of shift differential hours per week: n/a Commissions, bonuses, tips, other: $n/a (circle hourly weekly bi-weekly semi-monthly monthly one) yearly other List any anticipated change in the employee's rate of pay within the next 12 months: 3% ; Effective date: 06/01/2016 If the employee's work is seasonal or sporadic, please indicate the layoff period(s): Additional remarks: Sally Payroll Sally Payroll 04/30/2015 Employer's Signature Employer's Printed Name Date 9873 Arapahoe Road Suite A-1, Littleton, CO Employer [Company] Name and Address none Phone # Fax # NOTE: Section 1001 of Title 18 of the U.S. Code makes it a criminal offense to make willful false statements or misrepresentations to any Department or Agency of the United States as to any matter within its jurisdiction. Verification of Income Example REG WAGES $9.50 X 40 X 52 = $19,760 O.T. WAGES $14.25 X 6 X 52 = $ 4,446 TOTAL $ 24,206 Y-T-D Wages = ($6,845.50/17=$402.68wk X 52) = $ 20,939 REG WAGES $9.50 X 37 X 52 = $ 18,278 O.T. WAGES $14.25 X 5 X 52 = $ 3,705 TOTAL $ 21,983 Y-T-D Wages = ($6,845.50/17=$402.68wk X 52) = $ 20,939 *TOTAL INCOME FOR TAX CREDIT $24,206 *TOTAL INCOME FOR SECTION 8 $21,983 Unemployed Residents 18

19 Federal Work Study Child Support Allowances and Deductions 19

20 Underutilization of Units Unit Transfers Verifying Assets Under $5,000 20

21 EIV VAWA Record Retention 21

First Year Files Must keep files for 21 years First year records must be retained for a minimum of 6 years after the due date (with extensions) for filing the Federal Income Tax Return for the last

22 First Year Files Must keep files for 21 years First year records must be retained for a minimum of 6 years after the due date (with extensions) for filing the Federal Income Tax Return for the last year of the compliance period of the building. Must clearly document the household was qualified Be very careful to verify student status All Other Files Owners are required to keep all of the records for each unit, building and property for a minimum of 6 years (after the due date for filing extensions). Electronic Files Owners may use electronic storage systems instead of a hard copy of the records. 22

Files Owners must maintain documentation of all verification efforts

the resident moves out Denied applications must be kept for at least

review by the resident upon request or by a third party who provides

Files Owners must dispose of tenant files and records in a manner that

23 Files Owners must maintain documentation of all verification efforts throughout the term of each tenancy and for at least three years after the resident moves out Denied applications must be kept for at least three years after the denial The resident s file should be available for review by the resident upon request or by a third party who provides signed authorization for access from the resident Destroying Resident Files Owners must dispose of tenant files and records in a manner that will prevent any unauthorized access to personal information! Destroying Resident Files 23

24 COMPLIANCE CONSULTING, INC. HEATHER STAGGS Copyright 2016 S.T.A.R. Momentum Compliance Consulting, Inc. in Partnership with Piltch Associates, Inc. Not for duplication or distribution without prior consent 24

Managing Blended AR S

41 st Annual Seminar & Tradeshow May 20 22, 2018 LAX Mariott Managing Blended AR S The right benefits go to the right persons It is the responsibility of every owner, management companies and managers