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Tax Credit Compliance
Procedures Manual

The Tax Credit Compliance Procedures Manual was designed to give property owners and managers step-by step instructions on how to fulfill compliance requirements if Commission-issued low-income housing tax credits were used to finance a property.

Tax Credit Compliance Procedures Manual For more information or questions, property managers and owners should contact their Portfolio Analyst. Subscribe to E-NEWS Email and you will be notified when there are changes to this manual.

Tax Credit Compliance Manual Revision TC #2-2010 Memo (PDF)

Tax Credit Compliance Manual Revision TC #1-2010 Memo (PDF)

Color Cover (PDF)

Color Spine (PDF)

Cover Sheet (PDF) Rev 07/2012

Table of Contents (PDF) Rev 11/2011

Chapter & Appendix

Chapter: 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 |
Appendix: A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P

Chapter 1

Introduction (PDF) Rev 02/2009
(1.2) Tax Credit Program Overview
(1.3) Compliance Basics
(1.4) Minimum Low-Income Housing Set-Aside
(1.5) Restricted Rents
(1.6) Additional State Rules
(1.6) Compliance Process Overview
(1.6) Tax Credit Only Properties
(1.8) Tax Credit Properties with Tax-Exempt Bonds

Chapter 2

Federal Requirements (PDF) Rev 02/2009
(2.1) Summary
(2.2) For Use by the General Public
(2.3) Fair Housing
(2.3) Suitable For Occupancy; Non-Transient Use
(2.3) General Prohibition Against Student Housing
(2.5) Evictions
(2.6) Common Areas
(2.6) Common Area Units
(2.9) Mixed-Income Properties
(2.10) Available Unit Rule
(2.11) Available Unit Rule and Mixed-Income Properties
(2.12) Mixed-Income Buildings with Different Sized Units
(2.13) Available Unit Rule and 100% Affordable Properties
(2.14) Effect of Resident Moving Within a Building
(2.14) Utility Allowances Also See: Utility Allowance Information
(2.15) General Rule
(2.15) Utilities Paid by Owner
(2.16) Utility Company Estimate Also See: Appendix O
(2.16) Section 8 Rental Assistance
(2.16) Rural Development Rental Assistance
(2.16) RD-Assisted Buildings
(2.17) HUD-Regulated Buildings
(2.17) Changes in Allowances
(2.18) Compliance Affordable - Use Periods
(2.19) Commission Compliance Responsibility
(2.20) Scope of Compliance Review
(2.21) Rural Development (FmHA/RHS) Properties
(2.21) Tax Credit/Bond Financed Properties
(2.21) Joint Property Inspections Also See: Property Inspections

Chapter 3

Washington State Requirements (PDF) Rev 02/2009
(3.1) Introduction
(3.1) Summary of State Requirements
(3.2) Additional Low-Income Housing Use Period
(3.2) Additional Low-Income Housing Commitments
(3.3) Special-Needs Housing Commitments
(3.3) Newly Placed-in-Service Acquisition/Rehab Properties
(3.3) Large Households
(3.3) Persons with Disabilities
(3.4) Housing for the Homeless
(3.6) Housing for the Elderly
(3.6) Farmworker Housing
(3.7) Double Counting
(3.7) Marketing and Good Faith Efforts (the "30-Day Rule")
(3.9) Restricting Up-Front Charges
OTHER RESOURCES: Farm Work Household Certification Training Videos

Chapter 4

Rents & Tenancy Issues (PDF) Rev 02/2009
(4.1) How to Determine Rent
(4.2) Restricted Rent Requirements
(4.3) What Constitutes Rent
(4.4) Changes in Rent Limits
(4.4) Restricting Up-Front Charges
(4.4) Model Units
(4.4) Household Composition Issues

Chapter 5

Income & Asset Certification (PDF) Rev 02/2009
(5.1) Summary
(5.1) HUD Occupancy Handbook 4350.3, Chapter 5 | See also: Appendix N
(5.1) Income-General Information
(5.2) Verification
(5.2) Determining Annual Wage Income
(5.3) Overtime
(5.3) Year-to-Date Information
(5.4) Include Raises When Calculating Wages
(5.4) Tips
(5.5) Seasonal or Sporadic Wage Income
(5.5) Outside Agency Verifying Income
(5.5) Written Verification
(5.5) Verbal Verification
(5.6) Picture Identification
(5.6) Self-Employed Income Verification
(5.7) On-Site Staff and Management Personnel
(5.8) Social Security, Supplemental Security Income (SSI)
(5.9) Alimony and Child Support
(5.9) Public Assistance/Welfare Income
(5.10) Unemployment, Disability, Worker's Compensation, Severance Pay
(5.10) Military Pay
(5.11) Pensions, Veteran's & other Periodic Benefits
(5.12) Annuities
(5.12) On-Going Monetary Gifts
(5.13) Student Income
(5.14) Additional Income Verification Guidelines
(5.14) Income from Assets
(5.15) Types of Assets
(5.15) Stocks, Bonds, Treasury Bills, Certificates of Deposits, Money Market Funds
(5.15) Trusts
(5.16) Individual Retirement, Keogh, and 401(k) Accounts
(5.17) Rental Income
(5.17) Real Estate Owned
(5.17) Mortgage or Deed of Trust
(5.17) Personal Property Held as an Investment
(5.18) Lump-Sum Receipts
(5.18) Instructions for Valuing Assets
(5.19) Calculating Income from Assets
(5.19) Types of Excluded and Included Income
(5.20) Additional Income and Asset Information
Other Resources:
Calculating Assets 101- Part 1 & Part 2 Training Videos 05/2008

Chapter 6

Reporting & Records Retention (PDF) Rev 02/2009
(6.1) Summary
(6.1) Owner Annual Certifications
(6.3) Data Collection Requirement
(6.3) Supporting Documentation Forms
(6.7) IRS Forms 8609, Schedule A and 8586
(6.7) Annual Recertifications for 100% Low Income Tax Credit Properties
(6.8) Annual Recertifications for Mixed Income Properties
(6.8) Record Retention

Chapter 7

Noncompliance (PDF) Rev 02/2009
(7.1) Correction Period: Notice of Noncompliance to IRS
(7.1) Reporting Noncompliance with Commission Requirements
(7.2) Common Reasons for Noncompliance
(7.2) Recertifications at 100% Low Income Properties
(7.2) Properties with Recertification Waivers
(7.3) Resident Fraud

Chapter 8

Tax-Exempt Bond-Financed Properties with Tax Credits (PDF) Rev 02/2009
(8.1) Summary
(8.1) Income Restrictions

Chapter 9

Property Transfers (PDF) Rev 02/2009
(9.1) Summary
(9.1) Maintaining Credit Set-Asides
(9.2) Types of Transfers or Assignments Requiring Commission Consent
(9.3) Conditions and Consent
(9.4) Fees
(9.4) Timeframe and Completeness
(9.5) Owner Cover Letter
(9.5) Documentation Required for Sale of Property
(9.8) Documentation Required for Changes to General Partner or Managing Member
Attachments
Owner Request for Commission Approval - Summary of Transfer for Sale of Property (Word) Rev 04/2011
Owner Request for Commission Approval - Summary of GP/Managing Member Change (Word) Rev 04/2011
IRS Form SS-4 Application for Employer Identification Number (PDF)
Financial Solvency and Litigation Form (PDF) Rev 07/2008
Legal Counsel and Professional Representative Form (PDF)
Form of Opinion of Transferees Counsel (Sample) (PDF) Rev. 07/2008
Closing Contact Information (PDF) 06/2010
Tax Credit Transfer Agreement (Sample) (PDF) Rev 07/2008
Tax Credit & HFC Bonds Transfer Agreement (Sample) (PDF) Rev 07/2008
The latest IRS 8611, 8693, and SS4 forms and instructions are available at the IRS website.

Chapter 10

Qualified Contract Process (PDF) Rev 02/2009
(10.1) Summary
(10.2) Qualified Contract Packet Materials
(10.2) Fees
(10.3) Additional Owner Requirements
(10.3) Owner Certifications and Commitment
(10.4) Marketing by the Commission
(10.4) Three-Year Period
Attachments
Qualified Contract Notification Letter (PDF)
Calculation of Qualified Contract Price Worksheet (Blank) (Word)
Calculation of Qualified Contract Price Worksheet (Sample) (Word)

Chapter 11

Post Year-15 Monitoring Procedures (PDF) Rev 02/2009
(11.1) Introduction
(11.1) Qualifying for the Waiver
(11.2) Annual Reports
(11.2) Initial Resident Qualifications
(11.2) Re-Certifications
(11.3) Household Transfers
(11.3) Common Area Units
(11.3) On-Site Visits
(11.3) Compliance Fees
(11.3) Special-Needs Set-Asides
(11.3) Additional Low-Income Set-Asides
(11.4) Record Retention
(11.4) Noncompliance
(11.4) Tax Credit Compliance Workshops
(11.4) Fulltime Student Households
(11.4) Utility Allowances
(11.4) Additional Low-Income Housing Use Period
(11.5) Definitions
Attachments
Post-Year 15 Monitoring List (PDF) Rev. 04/2011
Post-Year 15 Eligibility Letter to Owners Sample (PDF) Rev. 04/2011
Post Year-15 Eligibility Letter to Owners (Word) Rev. 04/2011
Self-Certification of Annual Income (PDF) Rev. 04/2011
Self-Certification of Annual Income Instructions (PDF) Rev. 04/2011