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 Compliance Officer.  Subscribe to E-NEWS Email and you will be notified when there are changes to this manual.

 

Tax Credit Compliance Procedures Manual

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 |

 Chapter 1 Introduction (PDF) with Bookmarks  Rev May 2008

(1.2) Tax Credit Program Overview
(1.3) Compliance Basics
(1.3) Minimum Low-Income Housing Set-Aside
(1.4) Restricted Rents
(1.5) Additional State Rules
(1.5) Compliance Process Overview
 

Chapter 2 Federal Requirements (PDF) with Bookmarks  Rev May 2008

(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) with Bookmarks  Rev May 2008

(3.1) Introductions
(3.1) Summary of State Requirements
(3.2) Additional Low-Income Housing Use Period
(3.2) Additional Low-Income Housing Set-Aside 
(3.3) Special-Needs Housing Commitments
(3.3) Large Households
(3.3) Persons with Disabilities
(3.4) Housing for the Homeless
(3.6) Housing for the Elderly
(3.7) Farmworker Housing
(3.7) Double Counting
(3.8) Marketing and Good Faith Efforts (the "30-Day Rule")
(3.9) Restricting Up-Front Charges
 

Chapter 4 Rents & Tenancy Issues (PDF) with Bookmarks  Rev May 2008

(4.1) How to Determine Rent
(4.2) Restricted Rent Requirements
(4.2) What Constitutes Rent
(4.4) Changes in Rent Limits
(4.4) Tax Credit Projects with Section 8 Subsidies
(4.4) Restricting Up-Front Charges
(4.5) Model Units
(4.5) Household Composition Issues 
 

Chapter 5 Income & Asset Certification (PDF) with Bookmarks  Rev May 2008

(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
(5.4) Seasonal or Sporadic Wage Income
(5.5) Outside Agency Verifying Income
(5.5) Written Verification
(5.6) 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
(5.10) 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
(5.13) On-Going Monetary Gifts
(5.13) Student Income
(5.14) Additional Income Verification Guidelines
(5.14) Review Appendices M and N
(5.15) Types of Excluded and Included Income
(5.15) Income from Assets
(5.15) Types of Assets
(5.16) Stocks, Bonds, Treasury Bills, Certificates of Deposit, Money Market Funds
(5.16) Trusts
(5.17) Individual Retirement, Keogh, and 401(k) Accounts
(5.17) Rental Income
(5.17) Real Estate Owned
(5.17) Mortgage or Deed of Trust
(5.18) Personal Property Held as an Investment
(5.18) Lump-Sum Receipts
(5.19) Instructions for Valuing Assets
(5.19) Calculating Income from Assets


Chapter 6 Reporting & Records Retention (PDF) with Bookmarks  Rev May 2008

(6.1) Summary
(6.1) Owner Certifications
(6.3) Supporting Documentation Forms
(6.7) IRS Forms 8609, Schedule A and 8586
(6.8) Annual Recertification
(6.8) Record Retention
(6.8) "Deep Rent Skewed" Properties
 

Chapter 7 Noncompliance (PDF) with Bookmarks  Rev May 2008

(7.1) Correction Period:  Notice of Noncompliance to IRS
(7.1) Reporting Noncompliance with Commission Requirements
(7.2) Common Reasons for Noncompliance
 

Chapter 8 Tax-Exempt Bond-Financed Properties with Tax Credits (PDF) with Bookmarks  Rev May 2008

(8.1) Summary
 

Chapter 9 Property Transfers (PDF) with Bookmarks  Rev May 2008

(9.1) Summary
(9.1) Maintaining Credit Set-Asides
(9.2) Transfer Instructions
(9.2) Types of Transfers or Assignments Requiring Commission Consent
(9.3) Fees
(9.3) Process
(9.3) Cover Letter
(9.4) Timeframe and Completeness
(9.4) Documentation Required for Complete Ownership Changes
(9.7) Documentation Required for Non-Sale of Property

Attachments

A. Owner Request for Commission Approval, Summary of Transfer (Sale of Property) (DOC)  April 2008

B. Owner Request for Commission Approval, Summary of GP/Managing Member Change (DOC)  April 2008

C. SS-4 Application for Employer Identification Number (PDF) 

D. Financial Solvency and Litigation Form (PDF)  October 2006

E. Legal Counsel and Professional Representative Form (PDF) 

F. Form of Opinion of Transferees Counsel (PDF)  April 2008

G. Tax Credit Transfer Agreement (PDF)  May 2008 

H. Bond Transfer Agreement (PDF)   May 2008

The latest IRS 8611, 8693, and SS4 forms and instructions are available at the IRS website.

 

Chapter 10 Qualified Contract Process (PDF) with Bookmarks  Rev May 2008

(10.1) Summary
(10.2) Qualified Contract Packet Materials
(10.2) Additional Owner Requirements
(10.3) Owner Certifications and Commitment
(10.4) Marketing
(10.4) Three-Year Period
(10.5) Fees

Attachments
A. Tax Credit Properties Option Year List (1990 - 1995 Allocations)  (EXCEL)   (PDF) 

B. Qualified Contract Notification Letter (PDF)

C. Calculation of Qualified Contract Price Worksheet DOC (Blank)

D. Calculation of Qualified Contract Price Worksheet DOC (Sample)
 

Chapter 11 Post Year-15 Monitoring Procedures (PDF) with Bookmarks  Rev May 2008

Post Year 15 Monitoring Procedures Webcast  NEW!
Post Year 15 Monitoring Procedures Webcast Script NEW!

(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
(11.4) 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
A. Post-Year 15 Monitoring List (PDF)   December 2006

B. Summary of Post Year-15 Monitoring Procedures (PDF)  September 2006

C. Owner Request Letter for Post Year-15 Monitoring Procedures (DOC)

D. Resident Annual Income Self-Recertification (PDF)  Rev May 2008

E. Resident Annual Income Self-Recertification Instructions (PDF)  Rev May 2008

 

Chapter 12 Recertification Waiver Procedure (PDF) with Bookmarks  Rev May 2008

(12.1) Introduction
(12.1) Qualifying for the Waiver
(12.2) Request Process
(12.3) Annual Self-Certification Form
(12.3) Annual Reports
(12.4) Household Transfers
(12.4) Assumptions and Reservations
(12.5) Noncompliance
(12.5) Definitions

Attachments

A. Owner Request to Proceed for Recertification Waiver (Word)

B. Authorization to Proceed for Waiver of Annual Income Recertification (Word) 

C. Auditor Statement of 100% Compliance (Word) May 2007

D. Owner Letter to IRS (sent with IRS Form 8877)  (Word)

E. IRS Form 8877

F. Resident Annual Income Self-Recertification (PDF)  Rev May 2008

G. Resident Annual Income Self-Recertification Instructions (PDF)  Rev May 2008


Appendix A Glossary (PDF) with Bookmarks

Appendix B Tax Credit Frequently Asked Questions (PDF) Rev:  March 2008

Appendix C Regulations and Other Authority (PDF)  LIHTC Program Policies (PDF)

Appendix D Compliance Monitoring Fees (PDF)  

Appendix E
Sample Exhibit "B" to Regulatory Agreement (PDF)

Appendix F
Sample Utility Allowance Schedule (PDF)

Appendix G
Public Housing Authorities Link

Appendix H
Forms ~ State

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

Appendix J
Life Cycle of a Tax Credit Project (PDF)

Appendix K
Qualifying a Household (PDF)

Appendix L
Differences Between Tax Credits and Bonds (PDF)

Appendix M
Income & Asset Verification Summary Chart (PDF)

 Appendix N
HUD Occupancy Handbook 4350.3 REV-1 CHG-2 (Excerpts) (PDF)
Rev April 2008

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) NEW!


Compliance and Preservation Survey.

 

This page was modified on 05/09/2008.