LIHTC Property Owners May Provide Temporary Housing to Individuals Displaced by Hurricane Sandy

Written by Erik Whitton, Spectrum Enterprises

As a result of the recent storm which caused massive damage along the east coast and displaced thousands of individuals from their homes, property owners of LIHTC properties may provide immediate housing to such individuals with a temporary lift of the income limit and transient use restrictions.

Under normal circumstance a property owner must verify all income and assets for a family and make sure they fall within the income limit for that town, city, or county. And, individuals must sign a minimum 6 month lease (with the exception of single room occupancy SRO properties).

IRS notice 2012-68 provides guidance that these 2 requirements can be waived in order to provide emergency housing to individuals displaced by Hurricane Sandy. Here are the important notes:

  1. The displaced individual must have lived in a jurisdiction designated for Individual Assistance by FEMA as a result of Hurricane Sandy. Here is a link to the FEMA page with disaster declarations:  http://www.fema.gov/disasters
  2. The property owner must obtain written approval from the state housing agency for this relief. Each state housing agency will identify the time frame for this temporary housing but it will not extend beyond November 30, 2013. Here is a list of state agency websites and contact info: https://www.ncsha.org/node/2608
  3. The owner must notify the state housing agency that vacant units are available for rent to displaced individuals
  4. Owners must record the following data for their required record keeping:
    • Name of displaced individual
    • Address of damaged residence
    • Social Security Number
    • Statement signed under penalty of perjury by the displaced individual that, because of damage to the individual’s residence caused by Hurricane Sandy, the individual requires temporary housing. Owner must certify the date the displaced individual began temporary occupancy and the date the project will discontinue providing temporary housing as established by the state housing agency.
  5. The income limit requirement and transient housing requirement are the only 2 rules of LIHTC housing to be lifted during this period. All other rules apply. These would include rent restrictions, student  restrictions, etc.
  6. For a new LIHTC project in the first year of the credit period: a displaced individual temporarily residing in such a unit will be deemed a qualified low income tenant for the purposes of determining the qualified basis and minimum set aside. At the end of the temporary housing period (established by the state housing agency) the displaced individual will no longer be considered qualified.
  7. For vacant* units after the first credit year: the status of a vacant unit that becomes temporarily occupied by a displaced individual remains the same as the unit’s status before the individual moved in. *such a unit could have been considered a previously qualified vacant unit or an empty unit that had never previously been qualified.

Please refer to the following IRS links for the full text of this notice before making any decisions about providing temporary housing to displaced  individuals:

 

 

 

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