April 17, 2020

As of this date, we still do not have any official guidance from the IRS regarding alternative procedures to put into place during the pandemic. The IRS has been made aware of the State Housing Agencies concerns but as of today we have not received any official guidance.

Guidance from HUD has been issued via a Q&A document entitled, Questions and Answers for Office of Multifamily Housing Stakeholders -Coronavirus (COVID-19)

The guidance given in this notice applies to Iowa properties only.   

CARES ACT STIMULUS PAYMENT: 

On April 16, HUD issued guidance in the Q&A referenced above that the here specifically related to the 2020 stimulus payments (also called a “tax credit”) currently being issued to qualifying households. Page 9. Q4, advises that this payment is not to be considered income. There is precedence for this decision: In 2008, HUD Notice 08-05 (issued 8/18/2008) specifically excluded a similar stimulus payment made in 2008 from income calculations for HUD covered housing programs.

As a one-time payment that will not be taxable in 2020, IFA’s position is that these funds should not be counted as income when determining eligibility in an LIHTC, HOME or NHTF project. Check with your other funding source if you are unsure of their position. 

CORRECTIVE ACTION DEADLINES

If your project has been issued the Initial Owner’s Report and you are in the corrective action period you can request an extension.  Staff can grant extensions for up to 6 months if there is good cause. If the issue is related to noncompliance with the LIHTC program and required to be reported to the IRS on form 8823, in the absence of federal guidance, staff cannot provide a corrective action period of more than six months.

If the issue is an agency covenant issue (such as a supportive services plan or if the project is in its post-15 period) staff may have some flexibility in extending corrective action deadlines further. Please explain in your request how COVID-19 is preventing the correction of the issue and the date that you believe you can resolve the matter and provide a response to the Department.

ELECTRIC SIGNATURES

The State of Iowa does acknowledge the legality of digital signatures (see Iowa Code 554D.108 – Legal recognition of electronic records, electronic signatures, and electronic contracts.) Initial and Recertification documentation as well as leases and other lease up documentation may be signed electronically for the LIHTC and HOME programs. 

It is my understanding that HUD does not allow electronic signatures for purposes Section 8 documentation. See page 15 of the HUD Q&A for guidance on use of electronic signatures or check with your HUD monitoring agent for further information if needed.

EVICTION

The CARES Act imposes a 120-day (Between March 27 and July 24, 2020) moratorium on tenant eviction filings and charging late fees for most of the nation's affordable housing properties. Guidance, provided by Novogradac, on which properties are covered can be found here .

HUD also addresses evictions in the Q&A referenced earlier in this communication.

The Act does not address how this requirement will be enforced and Novogradac advises that legal advice from a knowledgeable attorney will be crucial if a property chooses to proceed with any eviction proceedings.

Effective March 20, 2020: Governor Reynolds temporarily suspends some evictions under the Iowa Uniform Residential Landlord and Tenant Act or the Manufactured Home Communities or Mobile Home Parks Residential Landlord and Tenant Act in certain circumstances, see full proclamation here.

INCOME AND RENT LIMITS

LIHTC Income Limits were released and became effective April 1, 2020. IFA has posted the LIHTC Income and Rent limits to the IFA Compliance web page in our normal format. At this time, it is not clear what kind of long-term impact COVID-19 will have on the nation’s economy, unemployment and future income and rent limits. However, keep in mind that through the Housing and Economic Recovery Act, once a project is placed in service, the income limits will not drop below those in place either at the time the last building was placed in service (PIS) or on the date of the Carryover Agreement, whichever date was elected by the Owner at the time of Carryover.

HOME and NHTF limits have not yet been released as of April 16, 2020. In the past few years these limits have been published in Mid-June. Until they have been released, please continue to utilize the 2019 HOME & NHTF limits posted on IFA’s Compliance web page .

INITIAL CERTIFICATION (Filling Vacant Units, Verification of Income)

The current situation doesn’t change Section 42’s nor HOME/NHTF program requirements that at move-in the household’s income must be below the maximum limit. We have no guidance from the IRS that we have the authority to waive the income eligibility requirements. Page 53 of the IFA Compliance Manual discusses verification requirements.

It is a decision to be made by your company as to whether you are comfortable filling a vacant LIHTC, HOME or NHTF unit with a household whose income you cannot verify with any accuracy. If, at recertification, they are over-income and your verification of income and assets was completed by the use of a notarized affidavit at move-in we would likely have you go back to the move-in date and verify (through historical records from their employer and other income sources) that they were eligible at move-in. If the information provided determines that they were over-income at move-in the unit would be out of compliance from the date of move-in until the date of move-out or certification that their current income is below the maximum income limit.

MONITORING

Our third-party vendor, Safe Building, will be contacting properties to set up the physical inspection (if your project is due to be monitored.) When contacted, you can advise that you would like to postpone the physical inspection. Safe Building will notify us that a property has asked for a postponement and your CO will reach out to set up the file audit. This means there will be two reports for the same year, one physical and one file.

RECERTIFICATIONS

If recertifications cannot be done electronically then you can postpone recertifications as long as each file contains a note to the effect that the recertification scheduled for xx-xx-xxx date has been postponed due to the property’s decision to hold off until such time as it is safe to do so and that the tenant is notified of the postponement.   

RESTRICTED ACCESS TO COMMON AREAS

We ask that IFA be notified of any closures to common area spaces. IFA asks that each property keep a file with the notice to the tenants about the closures with contact name/numbers for your staff so we can refer any callers back to you. This would also then be available if audited. If Supportive Services are held in Common Areas (such as community rooms) you should follow the instructions below regarding those services.

SUPPORTIVE SERVICES

Many properties have written supportive plans in place to provide services to tenants that may or may not involve physical space at the property. Activities that are to be offered in conjunction with requirements of a project’s LURA (such as fitness and nutrition classes) and that are social or recreational in nature should remain available to tenants of a property at the discretion of the ownership/management company.

If your LURA requires services that are not social or recreational in nature, IFA urges you to find ways to safely continue service delivery. For example, if your property is to provide after school meals, to avoid gatherings of more than 10 people and practice social distancing, an option is to deliver food to households and leave it outside their door or set up a schedule to stagger the number of people that come for the service.

If a property feels their tenant population is at risk, then the property should notify the tenants in writing of the suspension of activities providing a reasonable explanation and who to contact with questions or concerns. The property should then document their course of action and this documentation made available to IFA, upon request, during an audit or inquiry from a tenant. Tenants should also be notified when activities are able to return to their normally scheduled dates and times and the project file documented as well.

UNEMPLOYMENT BENEFITS

Many existing households and new applicants are finding themselves unemployed and do not yet have any documentation from Iowa Workforce Development to support the amount of unemployment they may be receiving. Additionally, there are several federal programs recently established that will be proving benefits to the unemployed.

IFA’s position for the LIHTC, HOME & NHTF programs is that the funds from both the PUA and FPUC are not considered income. We are basing our position on language from the HUD 4350.3, pages 5-11:

3. Temporary, non-recurring or sporadic income (including gifts) is not counted

On April 16, 2020 HUD issued guidance in the Q&A referenced above that the here specifically related to the 2020 stimulus payments (also called a “tax credit”) currently being issued to qualifying households. Page 9. Q4, advises that this payment is not to be considered income. IFA would advise properties to document the file -attempts to obtain the unemployment verification and if not, self-affidavit from the household member(s.) Do not count the FPUC or PUA funds but document the file (definition of PUA or FPUC and the 8350.3 guidance to not count these amounts because they are considered temporary income according to IFA.)

Vivian Probst, President of The TheoPRO Group has posted an excellent blog article which addresses calculating unemployment benefits entitled, A COVID-19 Dilemma: Calculating Unemployment During COVID-19, which can be found here .

VACANT UNITS

Vacant program units must be leased to qualified households. At this time, there is no relief to use program units for any other purpose, even if it is related to COVID-19.

OTHER FEDERAL LAWS

IFA is not aware of any waivers of the requirements of the Federal Fair Housing Act, the Violence Against Women Act, Section 504 of the Rehabilitation Act, or the Americans with Disabilities Act. Your property must continue to make reasonable accommodations and process transfer requests related to disabilities or VAWA protections. 

OTHER

HUD has established a web page of resources that is updated regularly. This contains a multitude of resources to help you make decisions at the property level.