Written By: Andy Bowden, CAHEC Board of Directors
I asked our staff (The Spectrum Companies) for feedback regarding some of the basic issues that they are seeing while performing compliance file reviews of LIHTC properties and do you know what the top recurring theme was? Over and over, I heard that a lack of knowledge on the part of the site staff regarding the regulatory requirements for their project was an issue. LIHTC projects can have vastly different income levels, rent limits, programing requirements, etc., and it is important for the site staff to know exactly what these requirements are. It is certainly not unusual for us to show up at a property to conduct a compliance audit and discover that site staff is unaware of many of the requirements of their project. Oftentimes the information is held at the corporate office and never communicated to the site.
To help solve this issue, we recommend that all management offices contain a “LIHTC Football” in either a binder or a fastened file folder. This binder will contain the most important compliance project documents and should contain, at a minimum, the following:
Regulatory Agreement: Every project has a deed restriction with the state credit agency that outlines most of the technical requirements that the project is bound to adhere to. This document may be referred to as a Deed Restriction, Extended LIH Agreement, Land Use Regulatory Agreement, or a similar name. The number of units, number of restricted units, and the income levels of the units is contained in this document. It is not unusual for us to audit a project where the manager is unaware of a commitment to have units set-aside at lower rent limits.