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First Steps

First Steps. Determine Eligibility, Chapter 7 Conduct Initial Interview Complete Application, Determine Household size and annual income Verification Process, Total Household Income Calculation TIC, TIC Addendum, and Lease. Application . Chapter 7-1

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First Steps

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  1. First Steps • Determine Eligibility, Chapter 7 • Conduct Initial Interview • Complete Application, • Determine Household size and annual income • Verification Process, • Total Household Income Calculation • TIC, TIC Addendum, and Lease

  2. Application Chapter 7-1 • Application must reflect detailed income, asset , and student status information • Managers should never accept an incomplete application • Complete separate applications for each adult household member unless the application addresses sufficient information regarding additional adults that will be living in the unit

  3. Exhibit NV-2 Employment Verification Chapter 7 D. • Must be fully complete • Must be current NHD exhibit • Never send through the applicant/resident • Must be mail or fax to & from the source • If faxed, fax banner must include date, company name, & fax #.

  4. Exhibit NV-2a Fax Header Clarification Form • Utilized to verbally verify/clarify fax header information only

  5. Certification of Tip Income NV-2b Chapter 7 • The NV-2b can be used as a last resort only • Using the NV-2b means tip income was not provided on the VOE (NV-2) and; • Was not reflected on current pay stubs (must provide stubs that show no tips) Continued………

  6. Certification of Tip Income NV-2b • Examples of Tip Earning Occupations • Food Servers, Waiters, Waitresses, Busboys • Cosmetology Field • Bellmen, Valets • Casino Workers • Cab Drivers, Limousine Drivers • Bartenders, Bar backs • Massage Therapists • Exotic Dancers • Pool Attendants

  7. Alternate Verification Methods Chapter 7 D. • Utilize only when written verification cannot be obtained or is incomplete • 4 – 6 current check stubs or earning statements • The work number • A statement from employer • Alternate verification & anticipated increase • File must reflect attempts to obtain exhibit NV-2 (at least one attempt required)

  8. Exhibit NV-2c & 2c.1Self-Employment Chapter 7 E. • Complete NV-2c for existing business • Copies of income tax return including Form 1040 Schedule C for business income (profit & loss) • Complete NV-2c.1 for new business – Mgr is responsible for follow up as required

  9. Other Income Chapter 7 E. • Social Security, Pension, SSI, SSD • Recurring Contributions and Gifts use NV-2h NEW FORM • Scholarship, Grants, & Veteran Admin. Benefits • Income for Students • Alimony/Child Support use form NV-2f

  10. Exhibit NV-2dUnemployed/Non-Employed Applicants Affidavit Chapter 7 E. • Unemployed persons • Non-employed persons • Anticipated Income • Unemployment benefits • Annualize regardless of remaining weeks

  11. Exhibit NV-2eCertification of Zero Income Chapter 7 D. • Each adult resident claiming zero income must complete

  12. Exhibit NV-2fAffidavit of Alimony/Child Support Chapter 7 E. • Utilize when alimony and/or child support is being received or anticipated within the following 12 months. • Divorce Decree (entire Decree), or • Letter (notarized) from person paying support, or • Local Court, or • Payment records from the DA’s office, or • Letter from applicants attorney, or • Copy of most recent support checks (need verification of how often received)

  13. Assets Chapter 7 F. of NHD manual and Asset inclusions / exclusions see HUD 4350.3 • Total household assets less than $5000 • 3rd party verification and imput of asset is not required (except HOME units) • All assets and income from assets must be listed on TIC and added to household income • IF total household assets = $5000 or over • 3rd party verification of each individual asset is required Continued……….

  14. Assets Cont. • Typical Assets • Checking / Savings • CD’s, Treasury Bills, Savings Bonds • Investment / Retirement Accounts • Trust Funds • Cash on hand • Real Estate Continued……….

  15. Assets Cont. • Real estate retained • Value - appraisal or real estate comparables utilizing the highest comp • Principal balance • Real estate contract or other (if being sold) • Rental agreement (if being rented)

  16. Selling Home Market Sale Value $205,000 Mtg. Balance - $49,500 Selling Expenses - $10,500 Net to Seller = $145,000 X Imputed Value .06% = $870 Renting Home Annual Rent $10,500 Less Mtg. -$5,700 Interest only) Less Tax/Ins -$1,296 Less Maint. -$1,200 Less Vacancy -$875 Net to Owner$1,429 Assets Cont.

  17. Assets - Real Estate Cont. • Real estate disposed of within two years prior to move-in - Use NV-2i NEW FORM • Settlement Statement (HUD-1) • Recorded Quit Claim • Foreclosure docs • Divorce Decree Settlement, etc.

  18. Exhibit NV-3Student Status Certification • Chapter 7 K. • Households comprised entirely of full-time students are not eligible unless the household meets one of five exceptions • IRS defines fulltime as • 12 credit hours per semester • Fulltime 5 months per year even if graduated prior to applying for TC unit.

  19. Exhibit NV-4Verification of Need for Live-in Aid Chapter 7 B. (Persons not included as household members) • 3rd party verify the need (initially & annually thereafter) • Can not be spouse or minor child • Is not obligated for financial support of resident

  20. Exhibit NV-4Verification of Need for Live-in Aid • Living in unit solely to provide necessary care to resident • Would otherwise not be living in unit • No survivorship rights to unit • Aide must pass all criminal/background checks (except landlord reference and credit) required for all residents • Owner has right to evict Aide that violates any community rules

  21. Exhibit NV-1 (TIC) • Instructions, see NV-1b & Chapter 7 of NHD Compliance Manual • Part I “Development data” • Part II “Household composition” chapter 7(B) • Persons not included • Persons temporarily absent • Full-time Student (chapter 7(K) Continued………..

  22. Exhibit NV-1 (TIC) cont. • Part III “Gross Annual Income” • Employment & Wages • Social Security/Pensions: Chapter 7(E)(3) • Public Assistance: Amount of income received such as TANF • Other Income: Chapter 7(E)(1), (4), (5), (6), & (8) Continued………….

  23. Exhibit NV-1 (TIC) cont. • Part IV “Income from Assets” • Chapter 7 F. • Household Certification and Signatures • After all verification of income and assets have been received, each household member age 18 and older must sign & date the TIC. Continued………

  24. Exhibit NV-1 (TIC) cont. • Part V “Determination of Income Eligibility” • Income limit per Family size • Check the appropriate % of Income Restriction (Declaration of Restricted Covenants)

  25. Exhibit NV-1 (TIC) cont. • Part VI “Rent” • Chapter 8 • Tenant paid rent: out of pocket amount • Rent Assistance: Amount of assistance, if any • Utility Allowance: Chapter 8 E., enter 0 if owner pays all utilities • Max rent • Meets rent % restriction: Chapter 8 B.

  26. Exhibit NV-1 (TIC) cont. • Part VII Student Status • Chapter 7 K. & NV-1b • Any exception requires 3rd party verification • Part VIII Program Type • Exhibit NV-1b Continued………

  27. Exhibit NV-1 (TIC) cont. Signature of Owner/Representative • Owner’s or owner’s representative must sign and date the TIC immediately following execution by the resident(s). • The responsibility of documenting and determining eligibility (including completing and signing the Tenant Income Certification form) and ensuring such documentation is kept in the tenant file is extremely important and should be conducted by someone well trained in tax credit compliance. Continued………

  28. Exhibit NV-1a TIC Addendum • Located on the NHD website • Must accompany the TIC • Instructions see NV-1b • Required at initial certification and 1st anniversary re-certification • All sections must be acknowledged and when applicable 3rd party verification Continued………

  29. Exhibit NV-1a TIC Addendum, Cont. • Students: Chapter 7 K. • Child Support/Alimony: Chapter 7 E. • Assets: chapter 7 F. • All adult household members and authorized project representative must sign and date on the same day as the TIC

  30. Re-Certification Chapter 7 I. • 1st anniversary & non 100% LIHTC projects • Same verification process as initial move-in

  31. Exhibit NV-1cAlternate Certification • Chapter 7 • Utilized annually after two years of tenancy • Must be 100% LIHTC projects • Post 1st year anniversary • Each qualifying household must complete the NHD Alternate Certification Exhibit NV-1c • NHD reserves the right to revoke if excessive noncompliance occurs

  32. Lease Chapter7 H. • All Households of LIHTC units must be certified and under lease • Term must be at least 6 months except for transitional housing • Very important: Management/owner is responsible for ensuring lease meets all state requirements as well as program requirements Continued……….

  33. Lease • NHD Lease guidelines • Legal name of all occupants (including minors) • Unit # and street address • Net monthly rent amount • Lease term • Address any issues that may affect the unit rent (rent limits, U/A’s, etc) • Section 42 Program (verbally explain what will be expected) • Signed by head, spouse, or co-head.

  34. Affordability Periods • LIHTC requires 30 year minimum for monitoring to ensure compliance unless the property rec’d preference points for a longer period (check DRC’S) • HOME/LIHTF may have periods from 5-20 years (depending on type of projects and amount of dollars invested) Projects with TC/HOME/LIHTF may be subject to two sets of Affordability Periods

  35. UPCS HUD’s Uniform Physical Condition Standards • Chapter 5 F. • Effective July 1, 2004 • Requires projects to be in decent, safe, and sanitary condition and in good repair.

  36. Annual Owner ReportsDue January 31st of each year Chapter 4(B)(1) • Exhibit C – Owner's Certificate of Continuing Program Compliance Chapter 4(B)(2) • Exhibit C.1 – Contact Information Form • Bond Report – Certification of Continuing Program Compliance (Regulatory Agreement) Chapter 10 • COL manual can be downloaded from the NHD website

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