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Tax Credit Compliance Procedures Manual

Tax Credit Compliance Procedures ManualThe 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. 

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 Procedures Manual - Revisions Memo #1-2017

Color Cover (PDF)

Tax Credit Compliance Procedures ManualColor Spine (PDF)

Cover Sheet (PDF) Rev 03/07/2017

Table of Contents (PDF) Rev 03/07/2017

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 11/2014
(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 07/2016
(2.1) Summary
(2.2) For Use by the General Public
(2.3) Fair Housing
(2.3) Violence Against Women Act (VAWA)
(2.3) Suitable For Occupancy
(2.3) Non-Transient Use
(2.4) General Prohibition Against Student Housing
(2.6) Evictions
(2.6) Common Areas
(2.7) 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) Utility Allowance Documentation
(2.15) Appendix O
(2.15) Utilities Paid by Owner 
(2.16) Changes in Allowance
(2.16) Compliance Affordable - Use Scope of Compliance REview Period
(2.17) Resident Certification Package
(2.18) Demographic Data Collection
(2.18) Inspections
(2.19 Correction Period for Non-Compliance
(2.20) Tax Credit/Bond Financed Properties

Chapter 3

Washington State Requirements (PDF) Rev 11/2014
(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 03/2015
(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 03/2017
(5.1) Summary
(5.1) HUD Occupancy Handbook 4350.3, Chapter 5 | See also: Appendix N
(5.1) Income-General Information
(5.2) Verification
(5.3) Determining Annual Wage Income
(5.3) Overtime
(5.3) Year-to-Date Information
(5.4) Include Raises When Calculating Wages
(5.5) Tips
(5.5) Seasonal or Sporadic Wage Income
(5.5) Outside Agency Verifying Income
(5.6) Written Verification
(5.6) Verbal Verification
(5.6) Picture Identification
(5.7) Self-Employed Income Verification
(5.8) On-Site Staff and Management Personnel
(5.8) Social Security, Supplemental Security Income (SSI)
(5.9) Alimony and Child Support
(5.10) Foster Child income
(510) Public Assistance/Welfare Income
(5.10) Unemployment, Disability, Worker's Compensation, Severance Pay
(5.11) Military Pay
(5.12) Pensions, Veteran's & other Periodic Benefits
(5.13) Annuities
(5.13) On-Going Monetary Gifts
(5.14) Student Income
(5.15) Additional Income Verification Guidelines
(5.15) Income from Assets
(5.16) Types of Assets
(5.16) Stocks, Bonds, Treasury Bills, Certificates of Deposits, Money Market Funds
(5.17) Trusts
(5.17) Individual Retirement, Keogh, and 401(k) Accounts
(5.18) Rental Income
(5.18) Real Estate Owned
(5.18) Mortgage or Deed of Trust
(5.19) Personal Property Held as an Investment
(5.19) Lump-Sum Receipts
(5.19 Instructions for Valuing Assets
(5.20) Assets Disposed of for Less than Fair Market Value
(5.20) Calculating Income from Assets
(5.21) Types of Excluded  and Included Income
(5.21 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 11/2014
(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 03/2017
(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
(9.6) 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)
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 03/2017
(11.1) Introduction
(11.2) Qualifying for the Waiver
(11.2) Annual Reports
(11.2) Initial Resident Qualifications
(11.3) Re-Certifications
(11.3) Household Transfers
(11.3) Common Area Units
(11.4) On-Site Visits
(11.4) Compliance Fees
(11.4 Special-Needs Set-Asides
(11.4) Additional Low-Income Set-Asides
(11.4) Record Retention
(11.5) Noncompliance
(11.5) Post-Year 15 Training
(11.5) Fulltime Student Households
(11.5) Utility Allowances
(11.5) Additional Low-Income Housing Use Period
(11.5) Definitions
Attachments
Post-Year 15 Monitoring List  (PDF)  Rev. 03/2017

OTHER RESOURCES:

Post Year-15 Monitoring Procedures | Script

Chapter 12

Recertification Waiver Procedure (PDF) Rev 02/2009
(12.1) Introduction
(12.1) Qualifying for the Waiver
(12.2) Request Process
(12.3) Annual Self-Certification Form
(12.3) Annual Reports
(12.3) Household Transfers
(12.4) Assumptions and Reservations
(12.5) Noncompliance
(12.5) Definitions

Appendix A

Glossary (PDF) Rev 02/2009

Appendix B

Tax Credit Frequently Asked Questions (PDF) Rev 03/2017

Appendix C

Regulations & Other Authority (PDF) | LIHTC Program Policies (See Current Year Policies) Rev 02/2009

Appendix D

Compliance Monitoring Fees (PDF) Rev 02/2009

Appendix E

Sample Exhibit "B" to Regulatory Agreement (PDF) Rev 02/2009

Appendix F

Sample Utility Allowance Schedule (PDF) Rev 02/2009

Appendix G

Public Housing Authorities Link Rev 02/2009

Appendix H

Forms ~ State  Compliance Forms Checklist (PDF) Rev 12/2011

Appendix I

Forms ~ Federal (Link to IRS: see Search Forms and Publications)

Appendix J

Life Cycle of a Tax Credit Project (PDF) Rev 02/2009

Appendix K

Qualifying a Household (PDF) Rev 02/2009

Appendix L

Differences Between Tax Credits and Bonds (PDF) Rev 11/2014

Appendix M

Income & Asset Verification Summary Chart (PDF) Rev 07/2016

Appendix N

HUD Occupancy Handbook 4350.3, Change 4 (Excerpts) Rev 11/2014
     Chapter 5: Determining Income and Calculating Rent (PDF) 
     Chapter 5, Appendix 3: Acceptable Forms of Verification (PDF)
     Chapter 5, Exhibit 1: Income Inclusions and Exclusions (PDF)
     Chapter 5, Exhibit 2: Assets (PDF)

Appendix O

Utility Allowance Procedures for LIHTC Properties (PDF) Rev 12/2015
Attachments
     A.  WSHFC Owner Utility Estimate Checklist - Methods 6-8  (Word)
     B.  WSHFC Owner Certificate of Utility Estimate  (Word)
     C:  Actual Usage Estimate Guidance  - Method 6  (PDF)
     D.  Utility Allowance Spreadsheet  - Method 6  (Excel)

Webinar
Utility Allowance Procedures for LIHTC Properties - Summary of Recent ReEvision Webinar 12/2015
Powerpoint (PDF)
Stream Presentation on Vimeo (32 minutes)
MP4 of Presentation (24MB)

Appendix P

Explanation of WSHFC's Special-Needs Housing Commitments 06/2010

03/07/2017

 
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