Compliance

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Charging residents fees for processing applications, running a credit check, transferring to another unit, or for the use of a parking space seems like a practical way to recoup operating costs. After all, these tasks and services require staff time, maintenance, and additional business expenses. However, there is risk involved. Tax credit regulations restrict what you can charge residents on top of their rent, and there are severe penalties for sites that go over the maximum rent.

Some people are uneasy when they're dealing with people with disabilities—mostly due to misinformation or a lack of knowledge about how to act. Fear of possible discrimination complaints often makes site staff nervous about words and phrases to use, what questions they can ask, and what not to ask when interviewing applicants with disabilities.

The tax credit program's requirements are complex, and understanding all of the rules and requirements can be challenging. Even experienced tax credit site staff can make errors from time to time. Mistakes can be costly, though, so we reached out to the compliance experts at several state housing agencies for their advice on a few key areas of compliance.

A written resident selection plan ensures that your site's application policies and procedures will be uniformly administered and that all applicants are treated fairly. It outlines for both staff and prospects the tax credit requirements and the site's criteria for screening applicants and renting units. If implemented consistently, the document also will help to protect your site against claims of discrimination.

Whether you advertise your site's low-income units online, in local newspapers or community newsletters, in phone recordings, or by putting up signs, your messages must abide by fair housing law. The Fair Housing Act (FHA) prohibits owners and managers of rental housing from discriminating against applicants on the basis of race, color, religion, sex, disability, familial status, or national origin. In addition, many states have passed fair housing laws that ban discrimination on other bases—such as military status, source of income, or sexual orientation.

There are some distinct differences between managing a mixed-income site versus a 100 percent tax credit site. The most obvious is that, with a 100 percent site, you know that all of your units are low income. But if your site is mixed income, and you rent to both low-income and market-rate households, your site staff must clearly understand which units have been designated for low-income households, and which rules apply. Making a mistake can be costly.

Here are a few tips that can help you and your staff to avoid noncompliance when managing a mixed-income site.

Do you have a simple system that allows your staff to quickly locate key compliance criteria in a user-friendly format? Whether your site is new or has been up and running for years, putting together a development binder that contains all of the governing documents for that site is crucial for the success of the property, says housing credit compliance expert Elizabeth Moreland, author of Practical Solutions for Managing Tax Credit Developments. “The day of having a simple tax credit property is gone.

It can be difficult to keep track of compliance requirements on a site with tax credit and market-rate units, especially during a lease-up phase. A development map gives site management a clear visual aid for meeting compliance criteria.

Mapping the development is generally a step that you take after putting together a development binder and creating a summary of the site's compliance criteria (see “Organize Your Site's Compliance Criteria into a Valuable Reference Tool” on p. 1). All it requires is a simple spreadsheet program.

Use of the Enterprise Income Verification (EIV) system for public and multifamily housing providers receiving HUD rental assistance became mandatory on Jan. 31, 2010. Progress seemed bumpy earlier in the year, with lagging participation from some owners and agents, multiple system outages, functionality problems, and data anomalies, but HUD's EIV team has been working to troubleshoot and fix the issues.

From time to time, you may receive requests from households that want—or need—to move to a new unit. For instance, they may need a larger unit, or they may desire a unit on a higher floor, or they may need a ground-floor unit to accommodate a disability. The IRS has made it clear that you don't need a special reason to transfer a household to a different unit at your tax credit site.