|
Dear Partner:
This notice serves as a reminder of project owner responsibilities under Treas. Reg. §1.42-5(c)(1) (Regulation). Pursuant to the Regulation, the Annual Owner Certification and Tax Credit summary report, with required attachments, must generally be submitted to OHFA by March 1 of each calendar year. To comply with this requirement, Owners of low-income housing tax credit (LIHTC) properties must annually submit the Annual Owner’s Certificate of Continuing Program Compliance to OHFA, and such certifications are made under penalties of perjury. Question (8) in the Annual Owner’s Certification summarizes the requirement for LIHTC project owners to report to OHFA any code violations issued by local governments, specifically stating the following:
Each building in the project was suitable for occupancy, taking into account local health, safety, and building codes (or other habitability standards), and the State or local government unit responsible for making local health or building safety code inspections did not issue a violation report for any building or low-income unit in the project. Additionally, all low-income units must have been continuously occupied, vacant but rent ready, or vacant for redecorating/minor repairs for a period of less than 60 days throughout the reporting period. If “No”, explain the nature of the violation and email a copy of the violation report as required by 26 CFR 1.42-5 and any documentation of correction. Do not email violations issued by OHFA (e.g. Form 8823) for the reporting year.
Additionally, the IRS 8823 guide provides the following reference on the reporting of code violations issued by local governments at LIHTC communities.
(1) Noncompliance may be identified when the agency reviews an owner’s annual certification that the buildings and units in an LIHC project were suitable for occupancy. (See Treas. Reg. §1.42-5(c)(1)(vi).) The owner must also certify that state or local authorities responsible for making inspections did not issue a violation report for any building or low-income unit in the project. If a violation notice or report was issued, the owner must attach a statement summarizing the violation report/notice (or a copy) to the annual certification submitted to the state agency. The owner must also state whether the violation was corrected. (8823 Guide 2024- VI. 11c – Violation(s) of the UPCS or Local Inspection Standards).
OHFA and its Program Compliance Department will discuss this topic at the next Compliance Advisory Committee meeting. It is important that property owners and property managers report all code violations that have occurred at the project each year. In the upcoming year, failure to report code violations is noncompliance and will be handled in accordance with IRS and OHFA policies, including the “Good Standing Policy” in OHFA guidelines.
Questions regarding this matter should be submitted to OHFA Compliance Help Desk.
Thanks,
Kellen A. Showes
Director of Compliance
Ohio Housing Finance Agency
kshowes@ohiohome.org
(614) 644-7633
| 