Qualified Household Income and Rental Compliance

Key requirements for a qualified household income, rental compliance, and inspection procedures in housing projects. Learn about student status rules, inspection frequency, file submission guidelines, and checklist items. Stay compliant with AHFA DMS updates and ensure accurate documentation for regulatory audits.

• Household Income
• Rental Compliance
• Inspection Procedures
• Student Status Rules
• AHFA DMS

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Uploaded on Feb 28, 2025 | 0 Views

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1. AAHA 5/23/24 The Basics

2. What is a Qualified Household? Income Qualified Gross Rent must be within the applicable maximum rent limits Student Status THE BASICS

3. THE BASICS STUDENT STATUS Housing Credit and HOME have two different Student Rules Depending on the funding the Project received, the Project must comply with one of the two rules or both

4. THE BASICS 1 2 3 Housing Credit will be inspected once every 3 years during the Compliance Period HOME will be inspected annually throughout the HOME Affordability Period On-site Inspections of the Project will be at least once a year Housing Trust Fund will be inspected once every 3 years during the Housing Trust Fund Affordability Period

5. Whichever is less of 20% of the units or Minimum Sample Size Chart are inspected THE BASICS HOW MANY FILES AND UNITS ARE INSPECTED Whichever is less of 20% of the files or the Minimum Sample Size Chart are reviewed

6. 01 02 03 04 THE HOUSEHOLD FILES WILL BE SENT TO AHFA FOR REVIEW. MAKE SURE TO SEND WHAT IS LISTED ON THE CHECKLIST MAKE SURE TO SEND THE REQUESTED FILES AND INFORMATION BY THE DUE DATE MAKE SURE AHFA DMS HAS BEEN UPDATED THROUGH THE REQUIRED TIMEFRAME THE BASICS

7. THE BASICS By the 15thof the month, AHFA DMS must be updated with all tenant events for the prior month. Example: Audit Day is 5/5/24 AHFA DMS must be updated through 3/31/24 Audit Day is 5/25/24 AHFA DMS must be updated through 4/30/24

8. The following will be on the checklist: The application for the household Current Utility Allowance(s) Rent Roll Rent Amounts for each bedroom size Income and Rent Set-Aside Report List of households that receive rental assistance List of households that receive Owner Rental Assistance List of Supportive Housing Units List of Units who certify Disabled/Homeless Affirmative Marketing Plan Waiting List THE BASICS FILE INSPECTION CHECKLIST

9. THE BASICS FILE INSPECTION CHECKLIST Move-in Lease Tenant Income Certification Income Certification(s) and Verification(s) Asset Verification(s) Student Certification(s) Housing Credit HOME Home Addendum Bond Eligibility Certification HTF Addendum

10. Recertification Tenant Income Certification Student Certification(s) Housing Credit HOME Post Year-15 **Income Certification(s) and Verification(s)** **Asset Verification(s)** THE BASICS FILE INSPECTION CHECKLIST

11. Extended Use Period This is the term commencing at the beginning of the Compliance Period and ending 15 years after the close of the Compliance Period plus additional term specified on the Land Use Restrictive Covenant (LURC). THE BASICS HOUSING CREDIT Compliance Period Means the 15-year period commencing the 1sttaxable year of the Credit Period of the Project.

12. THE BASICS HOUSING CREDIT Post Year-15 Compliance Period This is the 15-year period after the Compliance Period plus any additional years.

13. THE BASICS HOUSING CREDIT Rent Increase do not have to approved by AHFA. The following are the components of Gross Rent: Tenant Paid Rent Utility Allowance Make sure to check the following to determine the Housing Credit Income and Rent set-aside requirement: Housing Credit LURC Project Application

14. The HOME Affordability Period is 20 years. It begins when the HOME Loan closed. HOME funded properties are required to do a full recertification in years 6, 12, and 18 of the HOME affordability period Home Loan Closed 5/23/2024 THE BASICS - HOME Year 6 would be 2030 Year 12 would be 2036 Year 18 would be 2042

15. Submit HOME Project rent increases following the guidelines of Section 6.23 of the AHFA s compliance manual. The following are the components of Gross Rent: THE BASICS - HOME Tenant Paid Rent Utility Allowance Rental Assistance The gross rent must be at or below the current HOME Rent limits. AHFA will post the HOME income and rent limits each year once they are in affect.

16. THE BASICS - HOME Check the following to determine the Income and Rent Set-Aside requirement for your project: HOME LURC Project Application The set-aside MUST be followed throughout the HOME Affordability Period. After the completion of the HOME Affordability Period, you must review the Housing Credit LURC to determine the income and rent set- aside requirement for the remainder to the Extended Use Period.

17. THE BASICS HOUSING TRUST FUND 01 02 03 04 Housing Trust Fund (HTF) funded properties have a 30-year Affordability Period. An on-site inspection will occur once every three years. The Project must have a HTF Affirmative Marketing Plan. Components of Gross Rent are the following: Tenant Paid Rent Utility Allowance

18. The Projects units must be occupied by ELI- and/or VLI-qualified households. The minimum set-aside chosen by the Ownership Entity on the application will determine the household s income percentage. THE BASICS HOUSING TRUST FUND AHFA also provides the HTF income and rent limits on its website. A HTF rent increase must be approved by AHFA

19. Full Recertifications are every 6thyear of the HTF Affordability Period. HTF Loan Closing Date 5/1/2024 THE BASICS HOUSING TRUST Year 6 = 2030 Year 12 = 2036 Year 18 = 2042 FUND Year 24 = 2048 Year 30 = 2054 Self-Certifications are acceptable in the in-between years.

20. This is the day the household moves into the unit. THE BASICS EFFECTIVE DATE If the Project is 100% low-income then the effective date will stay with the household while they live at the Project, no matter if the household transfers to a different unit at the Project If the Project is NOT 100% then it is based on the move-in date. The household is allowed to transfer within the same building and the effective date will remain the same, but if they transfer to another building, then you must move them out of the current unit and re-qualify them in the new unit.

21. THE BASICS SUPPORTIVE DOCUMENTATION Supportive certification(s) or verification(s) must be done within 120 days before the effective date

22. Income Hierarchy 6-5-4-3-2-1 (highest to lowest) #6 EIV (Housing Credit does NOT allow) #5 Upfront Income Verification (UIV) Work Number Web-Based State Benefit Systems #4 Written 3rdParty Verification from the source Benefit letter Paystubs Empoyment Letter of Hire Bank Statemets #3 Written, 3rdparty Verification Form #2 Oral, 3rdparty Verification Documentation is Required #1 Self Certification LAST RESORT Documentation is Required THE BASICS HOTMA SUPPORTIVE DOCUMENTATION

23. THE BASICS HOTMA SUPPORTIVE DOCUMENTATION Number of Paystubs A minimum of two current and consecutive Bank Statement When 3rdparty asset verification is required, you must obtain a minimum of one (1) statement that reflects the current balance Alimony/Child Support The actual amount received NOT the amount the court ordered

24. All regular sources of income, including assets valued at $5,000 or more, must be verified by a 3rd party for Housing Credit Projects* THE BASICS SUPPORTIVE DOCUMENTATION All regular source of income, including assets no matter the amount, must be verified by a 3rd party for HOME Projects*

25. * If your property is using HOTMA then ignore the previous slide* THE BASICS - HOTMA Owners may determine net family assets based on a self- certification by the family that the family s total assets are equal to or less than $50,000, adjusted annually for inflation, without taking additional steps to verify the accuracy of the declaration at admission and/or reexamination. Third party verification is only required if total assets are greater than $50,000.

26. All properties must use HOTMA January 1, 2025. Properties are allowed to use HOTMA January 1, 2024 as long as AHFA is ready, which we are. THE BASICS - HOTMA

27. THE BASICS SUPPORTIVE DOCUMENTATION Verifications must be received prior to the completion of the Tenant Income Certification

28. AHFA provides addendums, certifications, verifications, and more in the Compliance section of the AHFA website, www.ahfa.com. www.ahfa.com THE BASICS SUPPORTIVE DOCUMENTATION You must use these certifications. If your company has different certifications, then they must be sent to AHFA for approval

29. AHFA puts the current set of income and rent limits for the following programs in the compliance section of the AHFA website: HOME HTF Non-Metropolitan If the Project has active HOME funds, you cannot use these income and rent limits If the Project has active Multifamily Bond financing, you cannot use these income and rent limits THE BASICS INCOME & RENT LIMITS What is missing? Housing Credit

30. Housing Credit THE BASICS INCOME & RENT LIMITS AHFA provides a link to the HUD Multifamily Tax Subsidy Limits and a link to the Novogradac Rent & Income Limit Calculator

31. A UTILITY ALLOWANCE IS AN ALLOWANCE FOR THE COST OF ANY UTILITIES PAID DIRECTLY BY THE HOUSEHOLD AND IS A COMPONENT OF GROSS RENT THE BASICS UTILITY ALLOWANCE DO NOT INCLUDE TELEPHONE, INTERNET, AND CABLE THE UTILITY ALLOWANCE MUST BE UPDATED ANNUALLY

32. THE BASICS UTILITY ALLOWANCE The following are acceptable forms of obtaining a utility allowance: Rural Development if the building or household receives Rural Development assistance HUD approved utility allowance buildings monitored by HUD Housing Authority If the household receives section 8 rental assistance, then you must provide the utility allowance from the housing authority that provides the rental assistance If the housing authority has jurisdiction over the area the Project is located

33. THE BASICS UTILITY ALLOWANCE An estimate received from the local utility provider Must be on the utility provider letterhead and have estimates for each utility paid by the household HUD Utility Schedule Model Must be approved by AHFA Energy Consumption Model Must be approved by AHFA

34. Each Project can be different THE BASICS SET ASIDE REQUIREMENTS Check the application for the Project Check the LURC for the Project if more than one, then use the most restrictive AHFA created a Set-Aside Report in the Compliance Section of the AHFA website If the Project does not have a report that can monitor the set-aside requirement, then you must use the AHFA Set-Aside Report

35. AHFA provides the student certifications in the Compliance section of the AHFA website. Student Verification (for educational institution) Housing Credit Student Self-Certification HOME Student Self-Certification Post Year-15 Student Self-Certification THE BASICS STUDENT CERTIFICATION

36. THE BASICS PHYSICAL INSPECTION National Standards for the Physical Inspection of Real Estate (NSPIRE) Inspectable areas Inside Unit Outside

37. THE BASICS PHYSICAL INSPECTION QAP POINT DEDUCTION Housing Credit Qualified Allocation Plan HOME Action Plan Make sure to review these documents so that you know what type of finding that could result in a point deduction for the Project

38. mfcompliance@ahfa.commfcompliance@ahfa.com 334-244-9200 800-325-2432 CONTACT US 7460 Halcyon Pointe Drive, Montgomery, AL 36117