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It’s important for a tax credit site manager to be aware of fair housing laws. In addition to legal troubles, violating fair housing laws can jeopardize an owner’s low-income housing credits. The Department of Housing and Urban Development (HUD) enforces the Fair Housing Act (FHA) and when a fair housing complaint is filed against your site, HUD or a state or local fair housing agency will investigate the complaint.

When certifying and recertifying households, you must first try to verify the items you include in household income with third-party sources. For example, you must ask a resident’s employer to verify her employment income. But third-party sources don’t always cooperate with you by returning verification forms.

Fortunately, HUD gives you alternatives for verifying income when third-party sources don’t cooperate, such as getting documentation from the household itself. But you must document that you couldn’t get the income verified by a third party.

Along with the colder weather comes the risk of carbon monoxide (CO) poisoning. CO is a colorless, odorless gas that’s the second most common cause of non-medicinal poisoning death. According to the Centers for Disease Prevention and Control (CDC), over 10,000 people are poisoned by CO and need medical treatment each year, and more than 438 people in the U.S. die annually from CO poisoning.

As a tax credit manager, you must be aware of households’ composition and how changes in the size of an existing household after the initial tenant income certification may invoke certain LIHTC rules. Generally, changes in family size don’t cause a unit to stop being income-qualified.

Every year site owners submit various IRS tax forms to claim the low-income housing tax credit on their tax return. IRS examiners look at the submitted information along with internal IRS information to determine whether to conduct an audit. If an examiner wants to continue with the audit process, the examiner will send a notice by mail. The letter will include a request for information and list documents to be made available for the audit. The request for information is known as an IDR, which stands for Information Document Request. An IDR is issued on IRS Form 4564.

By Carolyn Zezima

When managing a tax credit site, you may be confused about what you can and can’t do when it comes to creating a lease for your low-income households. For instance, you may be unsure whether you can give households a one-month lease without putting your site owner’s tax credits at risk. Or you may not know the right language to include in your lease before a household signs it, so you’ll be able to collect the maximum rent from the household or get it to cooperate with your compliance efforts.

The LIHTC program is an indirect federal subsidy used to finance the construction and rehabilitation of low-income affordable rental housing. LIHTC sites receive funding either as new construction or acquisition rehab. A recently published U.S. Government Accountability Office report on LIHTC development costs stated that the median per-unit LIHTC equity investment was about $147,000 for new construction projects (about 67 percent of the total development cost) and $103,000 for rehabilitation projects (about 61 percent of the total development cost).

Keeping each building’s applicable fraction on target is an essential part of a tax credit manager’s job. The applicable fraction is the percentage of a building’s units rented to low-income households. It comes into play when you calculate the building’s qualified basis, which affects whether the owner can claim all its tax credits. The qualified basis is the eligible basis (which rarely changes but can’t go up) times the applicable fraction (which often goes up or down).

It’s smart management practice to keep your household files up-to-date and complete all the time. Because LIHTC projects will be reviewed for compliance by the state and may be audited by the IRS, complete, well-organized files are very important.