Property Compliance News Briefs - November 2012

Thursday, November 1, 2012

The National Multi Housing Council and the National Apartment Association led a group of eight other industry members in responding to the Internal Revenue Service’s (IRS’s) proposed rule that would alter current regulations on utility allowances for low-income housing tax credit (LIHTC) properties. In cases where residents pay their own utilities, the current regulation allows state agencies to accept or reject energy consumption estimates submitted by licensed engineers. Among the provisions in the proposed rule is an amendment giving LIHTC-administering housing agencies broader discretion, permitting them to determine which certified engineers are authorized to prepare estimates. The coalition of developers, owners, management agents and lenders voiced a concern that agencies may use inaccurate methods for calculating utility allowances on an arbitrary basis and that the evaluation process would get overly complicated. The group wrote that a housing agency needs only to check a licensed engineer’s state certification to ensure expertise standards. The letter urged that the IRS direct housing agencies to base its evaluation on the facts of the individual project submission. The letter can be found at www.nmhc.org and the proposed rule is available at www.taxcredithousing.com.

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On Sept. 24, the U.S. Department of Agriculture Rural Development (RD) published Procedure Notice 458, a revision to the multifamily housing asset management handbook. HB-2-3560 officially stated that there will be no increase in the per-unit, per-month management fee for FY 2013, the second year in without a fee increase. The notice was published despite initial resistance to the decision by several groups like the Council for Affordable and Rural Housing (CARH), Institute of Real Estate Management and National Affordable Housing Management Association. CARH said that Tammye Treviño, the administrator of housing and community facilities programs at RD, announced the decision in an email sent to various state offices months ago. According to CARH, Treviño cited several determining factors for the decision including an increased error rate for the Improper Payment Information Act (IPIA) from 1.48 percent in FY 2011 to 3.44 percent in FY 2012, unresolved reporting issues in the multifamily information system (MFIS) and the number of RD offices that did not recommend a fee increase, as indicated by a management fee survey issued by RD. On Aug. 27, CARH and other affordable housing trade associations wrote a letter to RD, urging Treviño to reverse the decision. When RD confirmed its decision with the official notice, CARH announced that its management committee will schedule a conference call with other industry groups to discuss consensus for determining fees in the future. CARH’s notices can be found on www.carh.org and Procedure Notice 458 can be found at www.rurdev.usda.gov.

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The U.S. Department of Housing and Urban Development’s (HUD’s) Office of Public and Indian Housing released a notice on Sept. 28 to all public housing agencies (PHAs) that administer the housing choice voucher program. The notice describes HUD’s implementation of Section 302 as a way of amending the Section 202 Supportive Housing for the Elderly Act of 2010. Section 302 allows a PHA to require a family to pay more than 40 percent of its monthly adjusted income for an assisted living facility unit if the amount is reasonable to the services and amenities provided, and the HUD secretary deems it appropriate. PHAs may submit a waiver to apply for this approval and HUD will review requests on a case-by-case basis. To submit a waiver request, a PHA must verify that it is licensed and regulated by the state, makes supportive services available to residents and provides separate dwelling units for residents. The PHA must also describe the services and amenities provided that would warrant a higher payment. Finally, the PHA must submit a copy of sections 9 and 12 of the family report (form HUD-50058) to verify that the family share exceeds 40 percent of adjusted income. More information is available at www.hud.gov.

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