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When a qualified low-income household moves out of a unit at your tax credit site, you might not have another qualified household immediately available to move into the unit. And finding qualified households for your site can be difficult and take time. For these reasons, you may have units that have been vacant for a considerable amount of time. Fortunately, the tax credit law lets owners continue to claim credits for units that become vacant, as long as they comply with the vacant unit rule.

At this time of year, as the academic year starts, it may be a good time to review student eligibility restrictions for the LIHTC program. You probably know that, in general, you can’t rent a low-income unit at your tax credit site to a household that’s made up of full-time students.

If you’re like many tax credit managers, you might want to set aside a model unit that you can show to prospects to help “sell” your site. But before you set aside any unit at your tax credit site for this purpose, you must consider what effect your action may have on your compliance efforts. Depending on the type of unit you choose to set aside, you could put the owner’s tax credits at risk.

Generally speaking, if you manage a mixed-income site, you and your staff must recertify all low-income households at the site each year. Failing to meet recertification requirements is a leading cause of noncompliance that can cost the owner its tax credits. But recertification can be a time-consuming and burdensome process.

By Carolyn E. Zezima, Esq.

To calculate and verify household income at tax credit sites, owners and managers are required to follow the rules set out in HUD Handbook 4350.3 (Occupancy Requirements of Subsidized Multifamily Housing Programs). Specifically, sections 1 and 3 of Chapter 5 (Determining Income and Calculating Rent) set out the rules you must follow for calculating and verifying income.

Some tax credit sites may require a household to get a third party to sign a lease guaranty if its ability to pay the rent is questionable. In a guaranty, a third party (known as a guarantor) becomes legally responsible for the rent in case the household doesn’t pay. And sometimes, a household expects the guarantor will pay part of the rent each month.

Before you sign a lease giving a household the right to occupy one of your low-income units at a restricted rent, you’ll want to be sure that the lease and any addenda give you the authority you need to keep the site in compliance. For instance, if your site isn’t 100 percent low-income units or if your state requires it, you’ll want to require the household to give you documentation to prove that it’s still qualified at recertification.

A federal judge recently froze the latest iteration of President Trump’s travel ban, claiming that the new order is still essentially a Muslim ban. In the opinion, the U.S. District Judge pointed to President Trump’s own comments and those of his close advisers as evidence that his executive order is meant to discriminate against Muslims and declared there is a “strong likelihood of success” that those suing will prove the directive violates the Constitution.

In 2013, when the Violence Against Women Reauthorization Act (VAWA) was signed by President Obama, the list of covered programs was expanded to include the LIHTC and HOME programs as well as numerous other programs administered by HUD and the Department of Agriculture (USDA) Rural Development program. In November 2016, HUD published the final rule implementing housing provisions under VAWA as it applies to HUD programs.