USDA RD ESSENTIALS of OCCUPANCY

1. USDA RDESSENTIALS ofOCCUPANCY Karen Crosta KDC Solutions, LLC

2. Part 1 Introduction to RD MFH & Eligibility Part 2 Applications & Waiting List Maintenance Part 3 Tenant Selection & Unit Assignment Part 4 Basics of Certifications

3. PART 1 INTRODUCTION TO RD MFH PROGRAMS & ELIGIBILITY

4. INTRODUCTION to RD MFH • Finances the property • Reduces the effective interest rate • Provides Rental Assistance • Monitors its investment

5. RD MFH PROGRAMS • Section 515 • Direct Loan Program • Interest Credits reduce effective interest rate of loan to 1% - 3% • Note Rate Rent vs. Basic Rent • Must lease to income-eligible HH

6. RD MFH PROGRAMS • Section 514 Loans & Section 516 Grants for Off-Farm Labor Housing (LH) • Direct loans or grants to house farm laborers • Same general terms as Section 515 • Must lease to income-eligible HH • Section 514 Loans for On-farm Housing

7. In exchange for favorable financing and rental subsidies, owners agree to comply with all of RD’s rules and regulations regarding all aspects of managing and maintaining the property.

8. RESOURCES • HB-2-3560 • MFH Asset Management Handbook • HUD 4350.3 • Occupancy Requirements of Subsidized Multifamily Housing Programs • Chapter 5 • Appendix 3 • Management Plan

9. ELIGIBILITY

10. Name the 4 criteria that an applicant must meet in order to be determined eligible for occupancy at an RD MFH property.

11. ELIGIBILITY for OCCUPANCY • Must be income eligible for project or be eligible under another source (i.e. HUD, LIHTC); and • Must meet program definition of an eligible household; and • Must meet owner’s occupancy policies; and • Must meet owners’ screening criteria

12. Name the 3 additional criteria an applicant must meet in order to be eligible for an off-farm labor housing property

13. ELIGIBILITY for OCCUPANCY • Must be a US Citizen or legal alien/resident of US, Puerto Rico or the Virgin Islands • Tenant/Co-tenant must be a domestic farm laborer • Or a retired or disabled domestic farm laborer (or surviving household of deceased domestic farm laborer) • Must receive a substantial portion of income from farm labor employment • Income from farm labor must be at least 65% of the Federal Regional Income Limits for Hired Farmworkers (Attachment 6-H)

14. 1. Must be Income Eligible • Use RD published Income Limits (2/12/14) • Based on locale and household size • The HH adjusted annual income cannot exceed the applicable income limit • Three income levels: • Moderate = 95% of Median Income • Low = 80% of Median Income • Very Low = 50% of Median Income

15. Whose Income Counts When Applying Income Limits? • All persons intending to reside in unit, including foster children/adults • Children temporarily absent due to placement in a foster home • Children in joint custody arrangement (50%) • Children away at school but home for recesses • Unborn children • Children in process of being adopted • Temporarily absent family members • Family member in hospital/rehab for limited/fixed time • Persons permanently confined to hospital/nursing home Exclude: Live-in Aides & Chore Service Workers

16. Must meet program definition of an eligible household • Family Housing Units • May include elderly & non-elderly HH • Cannot market or prioritize to one group or the other • Elderly Housing Units • Tenant/co-tenant must be 62 or older, or have a disability • Cannot exclude children of eligible elderly HH • Cannot be exclusively for disabled HH

17. Must meet Owner’s Occupancy Policies • RD does not specify • Must be RD approved • Allow HH to choose unit size/style/location within your occupancy policies • Address reasonable accommodations • Include both HH members and eligible non-members

18. Must meet Owner’s Screening Criteria • Found in Management Plan • Must be applied uniformly

19. SPECIAL CONSIDERATIONS

20. ELIGIBILITY of STUDENTas TENANT/CO-TENANT ALL of the following must apply: • Must be otherwise eligible; and • Must be of legal age or otherwise legally able to enter into a contract per State law; and • Must have established a HH separate & distinct from parents/legal guardians; and • Must no longer be claimed as a dependent by parents/legal guardians per IRS; and • Must sign a written statement indicating if parents/legal guardians provide any financial assistance

21. INELIGIBILITY • An applicant is ineligible to move in if they fail to meet any of the eligibility criteria • A tenant is considered ineligible when, at recertification, they fail to meet either the income or the occupancy requirements for the unit or property. • If ineligible and required to vacate, must vacate within 30 days or at end of lease term, whichever is longer.

22. CONTINUED OCCUPANCY of INELIGIBLE TENANTS • Occupancy Ineligible (Over/Under Housed) • Must transfer to appropriate unit size within 30 days of availability • If no appropriate unit size exists in project, must vacate • Exception: May continue occupancy if no 1-bdrm. in project and it is in owner’s written policies. • Income Ineligible • Must vacate

23. REMAINING HH MEMBER • May continue occupancy regardless ofage, if: • Income eligible; and • Was a HH member & has legal ability to sign lease; and • Occupied unit with original tenant at time of death/departure; and • Signs own certification & establishes own tenancy • If over-housed, must transfer to appropriate unit size within 30 days of availability • If no appropriate unit size exists, must vacate

24. SURVIVING HH MEMBER For elderly HH in elderly project only! • May continue occupancy, regardless ofage, if: • Same criteria as “remaining HH member”; BUT • May remain in unit • Should transfer to appropriate unit size • May remain in unit if over-housed but appropriate unit size does not exist • If unit has accessibility features no longer needed, must transfer to non-accessible unit within 30 days of applicant/tenant applying for accessible unit.

25. PART 2 APPLICATIONS & WAITING LIST MAINTENANCE

26. Are applicants properly informed of where and when applications may be obtained and submitted? Does the application provide adequate information to determine the applicant’s place on the waiting list? Are applications processed in a timely manner? Are ineligible applicants adequately notified of their appeal rights? Is adequate documentation available to determine compliance with applicant processing requirements?

27. Are applicants properly informed of where and when applications may be obtained and submitted? • Must establish place and time for accepting applications • Should be posted in central location at property • Must be addressed in the Management Plan • Must be addressed in the AFHMP • Should be communicated in marketing

28. Does the application provide adequate information to determine the applicant’s place on the waiting list? • Names of all HH members, birthdates & current address • HH Income, Asset & Adjustment data • Consent to Release Wage Matching • Consent to Verify Employment • Indication of need for accessible unit and/or Disability Assistance adjustment to income • Certification the unit will be primary residence • SSN for all HH members age 6 and older • Citizenship/Eligible Immigration certification – LH only • Signature and date • Race, Ethnicity & Gender disclosure (below signature line) • Fair Housing statement (UL 11/9/12) • Fair Housing & Accessibility logotypes

29. APPLICATION • Must • Provide written list of all information needed to be considered complete • Advise priority cannot be established until all information is received • Verification not necessary to be considered complete

30. APPLICATIONS FAIR HOUSING RESTRICTIONS It is unlawful to inquire of the presence or severity of a disability, EXCEPT to:

31. APPLICATIONS FAIR HOUSING RESTRICTIONS • Determine eligibility for • Designated units or programs • Adjustment to income for elderly/disabled status • Priority for specific units • Determine if applicant is a current user of illegal substances, has prior conviction for use, manufacture, or distribution of illegal substances, or has successfully completed or is currently enrolled in a substance abuse recovery program.

32. APPLICATIONS FAIR HOUSING RESTRICTIONS • Disability related questions must be asked of ALL applicants • May verify disability only AFTER applicant/tenant requests a disability be considered

33. Are applications processed in a timely manner? 10 DAYS Provide written notification to applicant of disposition of application

34. APPLICATION DISPOSITION • Incomplete • Offer a unit • Placed on waiting list • Rejected

35. Are ineligible applicants adequately notified of their appeal rights? • Notify in writing • Outline reason for rejection • Include FCRASummary of Rights • Include Grievance and Appeal Rights & Procedures • 5 days informal meeting • 10 days to request a hearing • Deliver certified-return receipt or hand deliver with signed acknowledgement of receipt

36. Is adequate documentation available to determine compliance with applicant processing requirements? • Application cover letter • Application – Date/Time Stamped • Race/Ethnicity Data form • Authorization to Verify Employment – all adults • Consent to Release Wage Matching – all adults • Citizenship/Eligible Immigration Status – LH only • Application Status/Acceptance notifications

37. APPLICATION DOCUMENTATION • Paper • Date/time stamped upon receipt • Keep copies of notifications to applicant • Verbal • Document and keep with application • Record on Waiting List • Ensure dates/times recorded match with the paper copy date/time stamp

38. APPLICATION RETENTION • Inactive (withdrawn from wait list) • The longer of 3 years or to next supervisory review • Active • Until withdrawn + the longer of 3 years or next supervisory visit; or • If become tenant, retain in tenant file

39. WAITING LIST MAINTENANCE • All applications must be placed on the waiting list • Regardless of disposition, complete/incomplete or eligible/ineligible • Document date/time when completed application received • Document any activity and changes to application with date/time/explanation • Document final disposition of application

40. WAITING LIST MAINTENANCE • Date/time when completed application received • Name • Race/Ethnicity (Tenant) • Unit size(s) • Income level (V, L, M) • RA Eligibility • Need for accessible unit • Farm laborer status (LH only) • Active, Disabled/Retired local, Disabled/Retired non-local) • LOPE or FEMA • Room for notations

41. PART 3 TENANT SELECTION & UNIT ASSIGNMENT

42. TENANT SELECTION 1st Unit Size 2nd Income Level 1st= VL 2nd= L 3rd= M 3rd Category/Priority Level (Accessible unit, LOPE) First Come-First Served basis by date/time completed application was received within a category or priority (NA Labor Housing)

43. WAITING LIST PRIORITIES Rank by VL, L then M within each category • Vacant non-accessible units 1st to in-place tenant who is over/under-housed • Vacant accessible units • 1st to in-place tenant needing features • 2nd to applicant needing features from any income, with priority to VL, then L, then M • May offer unit larger than required

44. WAITING LIST PRIORITIES Rank by VL, L then M within each category • LOPE & FEMA have priority over any other applicants within their income group, regardless of unit size needed • May offer unit larger than required • LIHTC may leave unit vacant for LIHTC eligible applicant • HUD Section 8 may use HUD’s priorities

45. SELECTING WHEN RA AVAILABLE • VL has priority in any list or category • Low is OK if no RA-eligible tenant in occupancy and no VL applicant on wait list • Moderate-income are never RA eligible

46. TENANT SELECTION IN LH(with or without RA) • Off-Farm Categories 1st Active Farm Laborer HH 2nd Disabled/Retired domestic farm laborer who was active in local area at time of disability/ retirement 3rd Other Disabled/Retired farm laborer who was not active in the local area at time of disability/retirement

47. TENANT SELECTION IN LH • Within each category: VL, then L, then M • Exhaust one category before going to the next • Disabled has priority over Retired in any given category

48. PART 4 BASICS OF CERTIFICATIONS

49. BASICS • Certifications are a requirement of eligibility for occupancy and for benefits • A certification must be executed prior to occupancy and annually thereafter • Borrowers must verify and document all income, assets, expenses, deductions, family characteristics and any other factors that affect eligibility or level of assistance.

50. BASICS • Form RD 3560-8, Tenant Certification, is the means by which these verified factors are documented • A certification must be signed by both tenant and borrower on/before its effective date • Tenant signature certifies to accuracy of information provided (names, birthdates, income, assets, etc) • Borrower certifies that all the information recorded on RD form 3560-8 has been verified • Certifications are effective for 12 months