The Credential - December 2020

Welcome to the December edition of The Credential.

As we approach the end of what I can describe best as a “tumultuous” year, I reflect on how our lives have changed as a result of the global COVID-19 pandemic. We suffered pain and loss, but gained a much deeper appreciation for family and friends and technology that kept us virtually connected throughout this crisis.

On Oct. 30, the IRS published a Notice of Proposed Rulemaking in the Federal Register regarding the newest minimum set-aside for Section 42, Average Income Test (AIT), which outlined the IRS’ intent in treatment of certain rules governing the AIT. Although this much-awaited proposal provided further guidance relating to the Next Available Unit rule, it also presented restrictions that would pose significant challenges in practical application of the program, possibly elicit the need to create a “buffer” below 60% average, and raised questions on few other areas of concern. This regulation as currently proposed poses a significantly negative impact on the way we apply a federally mandated minimum set-aside, and consequently, many groups and associations backed by various stakeholders and industry practitioners have since combined their voices to draft comments to the IRS for consideration. We urge all Low-Income Housing Tax Credit (LIHTC) program participants to review the proposed regulations and submit comments to the IRS by Dec. 29.

On Nov. 23, a consortium of more than 140 organizations signed a letter to the IRS calling for an extension of deadlines and other necessary accommodation for the LIHTC program in light of the continued severe disruptions as a result of the COVID-19. IRS Notice 2020-53, released in July 2020, provided relief to LIHTC properties affected by COVID-19 on time-sensitive deadlines and requirements, but as many of those deadlines set to expire at the end of 2020, the letter calls for an extension of the deadlines and other accommodations until Sept. 30, 2021.

This month’s edition includes two articles featuring challenges in managing properties amid COVID-19 pandemic. Robin Thorne with RT Hawk Housing Alliance and Scott Michael Dunn with Costello Compliance bring attention to a number of key elements in managing compliance in the midst of COVID-19 in “Compliance Tips: Tenant Files, Inspections and COVID-19- What You Need to Know.”

Tari Bradley with E&A Team, Inc., discusses the Violence Against Women, Act from introduction and review of requirements, effects of non-compliance, impact of COVID-19 and preparing for 2021, in “VAWA, COVID-19 and Beyond.”

In the sixth edition in the continuing series exploring different sources for utility allowance, Amanda Lee Gross with US Housing Consultants brings in-depth focus on submetering and renewable energy sources  in “Conquering LIHTC Utility Allowances.” While exploring utility allowances, it is important to take into consideration that state housing agencies may impose different procedures in requesting and implementing alternate methods of utility allowances and may impose exclusions or limitations on certain properties.

Finally,  Scott Michael Dunn with Costello Compliance continues his Back to Basics series with a special focus on household transfers. He explains different types of tenant transfers, impacts on first-year credits, varying state policies, and potential pitfalls of transfers on rehab projects in “Back to Basics: Household Transfers.” The article illustrates the fundamental management practice, which carries potentially significant impact on the delivery of agreed-upon credits to the equity investors.

Finally, as part of our regular spotlight articles, we introduce

• HCCP Designee: Kerry Menchin, Director of Compliance at ConAm Management Corporation
• Board of Governors member: Christine Bennett-Martin, Owner at Bennett Martin Consulting
• HCCP exam distributor: Bette Newcomer, Director of Compliance at M&L Compliance Management

As a reminder, NAHB is hosting another webinar on “The Much-Anticipated End of 2020: A Discussion of Yearend, COVID & Compliance Webinar.” Join our panelists on Dec. 16 at 2 p.m. ET for a lively discussion on planning for year-end and year-end reporting in this COVID-extraordinary year. Register and hear from our panel of compliance experts on what to expect. The webinar is available free of charge to all active members of the HCCP community and are a perfect way to meet your continuing education requirements.

We hope you will find this publication of The Credential to be informative and useful. To ensure that we are addressing the topics that are most important to you, we welcome your feedback and suggestions.

As my term as chair of the Housing Credit Certified Professional (HCCP) Board of Governors comes to an end, it has been my true privilege to serve on the board. I would like to express my sincere appreciation to fellow professionals serving on the board for their passion and continuous commitment in promoting growth and education for LIHTC industry in their endeavor to provide safe, decent and affordable rental housing, and the continued support and dedication of extraordinary NAHB staff for keeping us on track.

Indisputably, the COVID-19 pandemic brought devastation on a global scale, but it is much more than a health or economic crisis; it is also a social crisis. Although practicing social distancing is vital in order to flatten the curve and keep our communities safe, we should also remember that social connection has lasting impact on our physical and mental health. As we approach the end of an exhausting year, we are all so eager to put behind us, sharing empathy, kindness and compassion with one another can be the single most important factor in surviving through this crisis together. Let us do what we can, while we can.

“A generous heart, kind speech, and a life of service and compassion are the things which renew humanity” – Buddha

With Warmest Regards,
Kristin Han, HCCP
WNC & Associates
Chair, HCCP Board of Governors

Stories in This Edition: