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

• Tax Credit Compliance Procedures - Revision #1-2010 Memo
• Tax Credit Compliance Procedures Manual - Revision 2009 Memo (PDF)
• Color Cover (PDF) Rev 02/2009
  Color Spine (PDF) Rev 02/2009
  Cover Sheet (PDF) Rev 02/2009
• Table of Contents (PDF) Rev 02/2009

 
Chapter and Appendix

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 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

1. Owner Request for Commission Approval - Summary of Transfer for Sale of Property (Word) Rev 07/2008
2. Owner Request for Commission Approval - Summary of GP/Managing Member Change (Word) Rev 07/2008
3. IRS Form SS-4 Application for Employer Identification Number (PDF)
4. Financial Solvency and Litigation Form (PDF) Rev 07/2008
5. Legal Counsel and Professional Representative Form (PDF)
6. Form of Opinion of Transferees Counsel (Sample) (PDF) Rev. 07/2008
7. Tax Credit Transfer Agreement (Sample) (PDF) Rev 07/2008
8. 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

1. Tax Credit Properties Option Year List (1990 - 1995 Allocations)  (Excel)  (PDF)
2. Qualified Contract Notification Letter  (PDF)
3. Calculation of Qualified Contract Price Worksheet (Blank)  (Word)
4. 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

1. Post-Year 15 Monitoring List  (PDF)   12/2006
2. Summary of Post Year-15 Monitoring Procedures  (PDF)  09/2006
3. Owner Request Letter for Post Year-15 Monitoring Procedures  (Word)
4. Resident Annual Income Self-Recertification  (PDF)  Rev 05/2008
5. Resident Annual Income Self-Recertification Instructions  (PDF)  Rev 05/2008

OTHER RESOURCES: Post Year 15 Monitoring Procedures Training Video with 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

Attachments

1. Owner Request to Proceed for Recertification Waiver  (Word)
2. Authorization to Proceed for Waiver of Annual Income Recertification  (Word)
3. Auditor Statement of 100% Compliance  (Word) Rev. 07/2008
4. Self-Recertification of Annual Income  (PDF)  Rev. 07/2008
5. Self-Recertification of Annual Income Instructions  (PDF)  Rev. 07/2008

Appendix A: Glossary (PDF) Rev 02/2009

Appendix B: Tax Credit Frequently Asked Questions (PDF) Rev 07/2009

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 02/2009

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 02/2009

Appendix M: Income & Asset Verification Summary Chart (PDF) Rev 02/2009

Appendix N: HUD Occupancy Handbook 4350.3 REV-1 CHG-2 (Excerpts) (PDF) Rev 02/2009

Chapter 5, Section 1: Determining Annual Income 
Chapter 5, Section 3: Verification
Chapter 5, Exhibit 1: Income Inclusions and Exclusions
Chapter 5, Exhibit 2: Assets
Appendix 3: Acceptable Forms of Verification

Appendix O: WSHFC, Utility Allowance Procedures (PDF) Rev 02/2009

Appendix P:  Student Income Chart (PDF) Rev 02/2009

This page was modified on 01/25/2010.