The Credential - June 2020

Housing Credit Certified Professional (HCCP)

Message from the Chair

Welcome to the June edition of The Credential.

On behalf of the Board of Governors, we sincerely hope this message finds you and your loved ones safe and in good health, and we continue to keep all those who have been directly impacted by COVID-19 in our thoughts.

In a mere few months, the COVID-19 pandemic has brought a whole new reality for all of us in the way we live, work, study and connect with one another. As the situation — around the world with unprecedented global health and economic crisis — continues to evolve, affordable housing industry advocacy groups and various government agencies have been taking appropriate actions to help sustain and support affordable housing communities.

The Coronavirus Aid, Relief and Economic Security (CARES) Act — the bill referred to as “Phase Three” of the Congress’s pandemic response — was signed into law on March 27. The legislation aimed at providing economic stimulus and relief for individuals, families and businesses that have been negatively impacted by the coronavirus outbreak, which included federal eviction moratoriums for tenants in almost all of the nation’s affordable housing properties.

Subsequently, on April 10, the IRS released Notice 2020-23 to provide additional relief to taxpayers affected by the COVID-19, including extension of several housing credit and tax-exempt bond deadlines referenced in IRS Revenue Procedure 2018-58. State allocating agencies have since suspended all physical inspections, and many have announced their state-specific guidance in taking proactive steps in response to the pandemic.

In this edition of The Credential, “Back to Basics: Acquisition and Rehab Tax Credits,” by Scott Michael Dunn with Costello Compliance, will explain some of the key concepts on credit streams, placing the buildings in service as it relates to starting the credit period and initially qualifying household on acquisition-rehab projects.

In the second article, Amanda Lee Gross from US Housing Consultants continues to explore other sources for utility allowances. Under IRC Section 42(g)(1) and (2), Low-Income Housing Tax Credits (LIHTC) units must be rent restricted, which entails proper calculation of appropriate allowances for tenant-paid utilities. For LIHTC projects, failure to properly calculate utility allowances and comply with gross rent test is reportable non-compliance by the IRS and will result in a loss of tax credits. Also, LIHTC property owners are required to obtain, analyze and document applicable utility allowance from the source at least once during each calendar year. In part four of this series, Gross further explains two other options — utilization of the utility company estimates and agency estimates — in close detail.

In the last article included in The Credential, “COVID Operational Challenges, Strategies, and Industry Resources,” Elaisa Trendelman, director of stabilized asset management for Raymond James Tax Credit Funds, Inc., discusses various changes brought on by the pandemic, its impact on the housing industry and how the industry is responding to those changes along with important considerations in developing best practices.

Finally, as part of our regular spotlight articles, we introduce:
  • HCCP Designee: Kim Davis, compliance analyst associate with JP Morgan
  • Board of Governors member: Beth Dziak, vice president of asset management operations with RBC Community Investments
  • HCCP exam distributor: Lori Dunn with Costello Compliance

As a reminder, NAHB is hosting another webinar on “COVID-19 Compliance & Operational Challenges in Multifamily Property Management” with Scott Michael Dunn with Costello Compliance; Jennifer Marchand with Oregon Housing and Community Services; Wesley Daniel with ConAm Management; and Susan Westbrook with NC Housing Finance Agency.

Again, the webinars are available free of charge to all active members of the Housing Credit Certified Professional (HCCP) community and a perfect way to meet your continuing education requirements.

I hope you find the information provided in 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.

We send our best wishes to all of you, and in this is extraordinary times, it calls on all of us to support one another with care and compassion.

“It is one of the most beautiful compensations of this life, that no man can sincerely try to help another without helping himself” – Ralph Waldo Emerson.

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


Stories in This Edition:

COVID Operational Challenges, Strategies, and Industry Resources
Utility Allowance Series, Part 4
Back to Basics: Acquisition Rehab Tax Credits
HCCP Board of Governors Spotlight
HCCP Designee Spotlight
HCCP Distributor Spotlight
HCCP Board of Governors Chair Kristin Han