Q&A: EIV System Prohibited for LIHTC Compliance

Published by James R. Kroger on Tuesday, March 1, 2011
Journal thumb March 2011

Question: I am the property manager of a Project Based Section 8 project that was also funded with low-income housing tax credits (LIHTCs). I am now required to use the Enterprise Income Verification (EIV) system to verify income for the Section 8 program. Can I use EIV information to verify household income for the tax credit program?

Answer: No.

The EIV system is a web-based system that contains third-party income source information for Social Security, Supplemental Security Income, employment, unemployment and other sources of household income. The U.S. Department of Housing and Urban Development (HUD) has entered into computer matching agreements with these third-party sources to use the information for certain HUD housing programs. According to guidance issued by HUD in May of 2008, EIV data can be used to verify tenant income for specific HUD multifamily housing programs; EIV data cannot be used to verify tenant income for LIHTC program requirements. The contracts that HUD has entered into with third-party sources of information contained in EIV allow access to this information ONLY for use in conjunction with the following HUD rental assistance programs:

  • Section 8 Project-Based Assistance
  • Rental Assistance Payment (RAP)
  • Section 202 Project Assistance Contract (PAC)
  • Section 202 Project Rental Assistance Contract (PRAC)
  • Section 811 Project Rental Assistance Contract (PRAC)
  • Section 236
  • Section 221(d)(3) Below-Market Interest Rate (BMIR)
  • Section 101 Rent Supplement

As of January 31, 2010, the above referenced programs are required to review the EIV system information for every household on interim and annual reexaminations.
The information in the EIV system is extremely sensitive as it is protected under the Federal Privacy Act and HUD’s agreements with the third-party sources of the information. Penalties for misuse or unauthorized disclosure include a felony conviction, a maximum of $5,000 or up to five years in prison, and civil damages. Unauthorized inspection is a misdemeanor and includes penalties of up to $1,000 and/or one year in prison, and civil damages.

HUD has taken care to protect the sensitive data provided through EIV and allows its use only for limited official purposes, including:

Public Housing Authorities (PHAs): For verifying the employment and income at the time of interim and annual reexaminations in connection with the administration of the specific HUD rental assistance programs referenced above;

HUD Staff: For monitoring and oversight of compliance with the specific HUD rental assistance programs referenced above; and

Independent Auditors: For use in determining compliance with the specific HUD rental assistance programs referenced above in connection with financial audits as engaged by the PHA or HUD.

When a project’s financing includes one of the HUD rental assistance program referenced previously and LIHTCs, the EIV information required for the HUD rental assistance program needs to be kept separately from the LIHTC qualification documents for each household. The verification of income and assets required for the LIHTC program must support the household’s income fully without the use of the information provided by EIV. Compliance monitors from the state housing credit agency and auditors from the Internal Revenue Service cannot be given access to the EIV information when monitoring for compliance with the LIHTC program requirements.