2020 Income Limits

March 31st, 2020

HUD has announced the 2020 income limits for the MTSP housing programs effective April 1, 2020. This includes low income housing tax credits and tax exempt bond financing. HUD allows for a 45 day grace period, which means these limits must be in use by May 15, 2020.

Our advice to all housing professionals is to immediately check for an increase for your sites. If the income limits in your area have increased go back through any files denied over the past few months to see if any slightly over income households may qualify under the new limits.

To find your 2020 income limits visit this site (and make sure to bookmark it!):

https://www.huduser.gov/portal/datasets/mtsp.html

Anticipated Income and Rideshare Drivers

March 25th, 2020

Written by Jennifer Robinson, Spectrum Enterprises

Nowadays, many of us have apps on our smartphones that allow us to, within seconds, hail a ride from our exact location to our desired destination using only our fingertips. The ridesharing industry exploded onto the scene and changed the way millions of people get from Point A to Point B. Individuals worldwide now have the opportunity to work for themselves from the comfort of their own vehicles, and this has had a major impact on the work we do.

For decades, self-employed applicants and/or residents were rare. The most common examples were hairdressers and barbers or those selling products like cosmetics or food storage containers from catalogue companies. With the rise of the “gig-economy” has come a significant increase in self-employed individuals. It is important to understand that rideshare drivers are not employees of the companies that own the apps/services, they are considered “self-employed partners.” Instead of the pay checks that regular employees receive with taxes withheld, they are responsible for paying their own taxes on the payments they receive. At year end they are issued a Form 1099 or 1099K instead of a W2, and they file a Schedule C with their tax returns.

The HUD Handbook instructs that income from a business is handled differently than pay from regular employment. Instead of using the gross income from pay checks (as with regular employees), the net income from a business is used to determine income for self-employed individuals. It is not required that third-party verification be obtained or attempted and a series of pay checks is not sufficient proof of income. Instead, the individual must provide proof of their gross receipts/income and expenses. Many agencies also require copies of tax returns and current year-to-date income and expenses.

So, what does this really look like for rideshare drivers? Drivers can access and print their complete history. Should we request every last detail, the payments and tips received for every single ride they’ve given since they started working this gig – NO! A million times NO! Keep it as simple as possible, minimize the amount of paper used, and make the whole scenario easy to follow for anyone who may later review the resident’s file. Let’s start with the basics.

What you need to know:

  1. When did this person start driving as a rideshare “self-employed partner”?
  2. Do they drive using more than one company/app?
  3. Since they started, did they stop for any substantial period of time?
    • If so, when and how long?
    • Is another pause or decline expected to repeat/continue? If so, why?

What documentation to request:

  1. A Self-Employment Income Affidavit
    • Completed by the individual and detailing dates active, past gross income and expenses, and estimated income and expenses for the next 12 months.
    • If driving for multiple companies, a separate affidavit for each.
  2. Tax Return(s) including Schedule(s) C
    • Recommended for at least 3 years
    • Or all years active if less than 3 years
    • And corresponding Form(s) 1099/1099K
  3. Monthly Print Outs of Ride Income
    • This is a summary of the month, not a ride-by-ride or weekly or daily breakdown (remember, we are attempting to reduce the amount of paper in your file and make this simple and clear).
    • If they have been driving for multiple years, Spectrum recommends monthly history for the current year to date and the previous year.
  4. Proof of Expenses
    • This is included on the Schedule C for previous years.
    • Receipts may be needed for current year if the income source is new and a full year’s tax return is not available.
    • Several ridesharing companies allow drivers to upload receipts, etc. to track their expenses along the way instead of having to keep separate records. The driver should be able to include this in their monthly summary if using this feature.

Remember it’s perfectly fine to tell someone they need to organize their shoebox of receipts into an organized format that you can follow, you are not their accountant and are not expected to act as one. That said, if they do have an accountant, a letter on letterhead from an accountant stating past, current, and expected future earnings can serve in place of actual receipts.

Remember, if they did not work in this field or for the same gig company for all of the previous year, the total net income on their tax return is not an exact estimation of what they will earn in the next 12 months. If they only drove for eight months in 2019, the amount from the tax return should at least be divided by eight and multiplied by twelve to represent a full year’s income. A more accurate approach would be to collect the monthly print outs from when they started through present to look for patterns, fluctuations, increases, etc.

Just as we were really starting to understand how to cope with this new form of income, the coronavirus (COVID-19) pandemic hit and it is important that we are aware of how this will impact our approach to determining income for rideshare drivers. It is not expected that the slow-downs will continue forever, using March-April 2020 income as a snapshot to represent the next 12 months is likely not accurate or appropriate.

In light of recent shutdowns and “social distancing”, it seems that income from this gig-economy source will need some additional analysis. As of March 17, 2020, Uber and Lyft have temporarily suspended their carpooling services (Pool and Shared) so that strangers cannot ride with one another in an attempt to flatten the curve of COVID-19. In large cities like New York and Seattle, this type of service was a substantial portion of several drivers’ fares.

Uber has reported as much as a 70% decline in trips in cities hardest hit by COVID-19. In an attempt to offset the income loss, several traditional rideshare drivers are turning to take-out food delivery services like DoorDash, Postmates, GrubHub, and UberEats. Don’t forget to ask about these.

It has always been important to analyze income and expenses related to self-employment, but the rise of the gig-economy has significantly increased the frequency of doing so in the LIHTC management and compliance industry. Don’t be afraid to ask for more information or documentation. If an applicant cannot provide enough organized detail, you may not be able to rent to them.

Spectrum is Hiring!

November 7th, 2019

Affordable Housing Compliance Analyst

Spectrum Enterprises Inc specializes in compliance oversight for the low-income housing tax credit (LIHTC) program. Our services include document analysis, tenant file reviews, application pre-approvals, client training, and site inspections of previously certified low income housing units. Our national roster of clients includes state housing agencies, leading investors, syndicators, developers, and asset and property management companies.

The position is physically located in our corporate office and is not open to a telecommuting or home office arrangement. Our current office will be re-locating before year end from Cape Elizabeth to the Maine Mall area in South Portland.

This is a permanent full time position requiring the following skills and professional characteristics, with previous LIHTC compliance analysis and/or familiarity is strongly preferred:

  • Industry training and certification (C3P, HCCP, COS, etc.) and/or prior experience with state agency compliance manuals, IRS forms and guides, and the HUD 4350.3 handbook
  • Highly organized and reliable person with analytical mind, attention to detail, strong math skills
  • Excellent written and verbal communication is essential
  • Must be an independent, motivated, and resourceful person with the ability to balance multiple projects and deadlines
  • Strong computer skills including internet searches, email, Word, Excel, Google, and working in a network environment with shared drives

Spectrum is an equal opportunity employer. We offer a competitive starting salary and opportunity for growth. Employees receive a generous benefit package including medical, vision, dental, life, STD, LTD, 18 paid personal days and 9 holidays each year to start, and 401k plan participation after 1 year of service and a yearly employer contribution.

Candidates must submit a cover letter and resume and must pass a background check.

If interested please apply online at www.Indeed.com.

SOCIAL SECURITY COLA FOR 2020

October 10th, 2019

October 10, 2019: The Social Security Administration has announced the Cost-of-Living Adjustment (COLA) for 2020.  According to www.ssa.gov:

“Social Security and Supplemental Security Income (SSI) benefits for nearly 69 million Americans will increase 1.6 percent in 2020.

The 1.6 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 63 million Social Security beneficiaries in January 2020. Increased payments to more than 8 million SSI beneficiaries will begin on December 31, 2019. (Note: some people receive both Social Security and SSI benefits)”

You can add the 1.6% COLA by multiplying the current award amount by 1.016.

For management staff, be sure to apply this COLA to benefits for the appropriate number of months. 

Example:

Mrs. Smith would like to move in on December 1, 2019.  Her 2019 gross Social Security monthly amount is $928.  You will calculate her Social Security income as follows:

$928 x 1.016 = $942.85 (2020 monthly amount)

$928 x 1 = $928 (December 2019)

$942.85 x 11 = $10,371.33 (January – November 2020)

$928 + $10,371.33 = $11,299.33 (12 months)

If you have already processed files for move-in for January 2020, it is recommended that you review the household income and apply the COLA to benefits issued by the Social Security Administration since it is a known anticipated change in income.

 

SOCIAL SECURITY COLA FOR 2019

October 11th, 2018

October 11, 2018: The Social Security Administration has announced the Cost-of-Living Adjustment (COLA) for 2019.  According to www.ssa.gov:

“Social Security and Supplemental Security Income (SSI) benefits for more than 67 million Americans will increase 2.8 percent in 2019.

The 2.8 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 62 million Social Security beneficiaries in January 2019. Increased payments to more than 8 million SSI beneficiaries will begin on December 31, 2018.”

You can add the 2.8% COLA by multiplying the current award amount by 1.028.

For management staff, be sure to apply this COLA to benefits for the appropriate number of months. 

Example:

Mrs. Smith would like to move in on December 1, 2018.  Her 2018 gross Social Security monthly amount is $928.  You will calculate her Social Security income as follows:

$928 x 1.028 = $953.98 (2019 monthly amount)

$928 x 1 = $928 (December 2018)

$953.98 x 11 = $10,493.78 (January – November 2019)

$928 + $10,493.78 = $11,421.78 (12 months)

If you have already processed files for move-in for January 2019, it is recommended that you review the household income and apply the COLA to benefits issued by the Social Security Administration since it is a known anticipated change in income.

 

SOCIAL SECURITY COLA FOR 2018

October 13th, 2017

October 13, 2017: The Social Security Administration has announced the Cost-of-Living Adjustment (COLA) for 2018.  According to www.ssa.gov:

“Monthly Social Security and Supplemental Security Income (SSI) benefits for more than 66 million Americans will increase 2.0 percent in 2018.

The 2.0 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 61 million Social Security beneficiaries in January 2018. Increased payments to more than 8 million SSI beneficiaries will begin on December 29, 2017.”

You can add the 2.0% COLA by multiplying the current award amount by 1.020.

For management staff, be sure to apply this COLA to benefits for the appropriate number of months. 

Example:

Mrs. Smith would like to move in on December 1, 2017.  Her 2017 gross Social Security monthly amount is $928.  You will calculate her Social Security income as follows:

$928 x 1.020 = $946.56 (2018 monthly amount)

$928 x 1 = $928 (December 2017)

$946.56 x 11 = $10,412.16 (January – November 2018)

$928 + $10,412.16 = $11,340.16 (12 months)

If you have already processed files for move-in for January 2018, it is recommended that you review the household income and apply the COLA to benefits issued by the Social Security Administration since it is a known anticipated change in income.

 

2017 Income Limits

April 14th, 2017

HUD has announced the 2017 income limits for the MTSP housing programs effective April 14, 2017. This includes low income housing tax credits and tax exempt bond financing. HUD allows for a 45 day grace period, which means these limits must be in use by May 29, 2017.

Our advice to all housing professionals is to immediately check for an increase for your sites. If the income limits in your area have increased go back through any files denied over the past few months to see if any slightly over income households may qualify under the new limits.

To find your 2017 income limits visit this site (and make sure to bookmark it!):

https://www.huduser.gov/portal/datasets/il.html

2015-2016 Staffing Changes

April 21st, 2016

The private monitoring division has experienced consistent growth over the past several years and we have made the following staffing adjustments to better serve our clients.

1. Jen Borland is now the main point of contact for all of our “File Pre Approval” work. Jen has taken an increased role in this division to oversee a staff of 12 full time employees providing this service to over a thousand properties across the US. If you have any questions about this service or want to request a proposal – please contact Jen Borland directly. (207) 805-0025 or jborland@spectrumlihtc.com

2. Jennifer Borland is now the main point of contact for all of our “Tenant File Training” work. Jennifer has several years experience providing LIHTC compliance reviews for hundreds of properties throughout the US. In recent years she has been delivering full day training sessions to groups of property managers on how to certify low income tenants and successfully maintain tenant file records to achieve clean reports from investor and state agency partners. If you have any questions about this service or want to request a proposal – please contact Jennifer Borland directly. (207) 805-0025 or jborland@spectrumlihtc.com

3. As of January 2016 Wesley Chisholm has been with Spectrum for 2 full years. In his current role, Wes has been the main point of contact for many of our clients to get proposals and contracts in place; working with sites on how to submit files to our office using our online portal; generating all invoices; and helping to shape the format of all reporting used by Spectrum. Wes will be gradually moving out of this role as he is being promoted to a full time compliance analyst. We have hired Daniel Warren to take over the role being vacated as a result. Daniel is a recent graduate of the inaugural Property Management Training class at Southern Maine Community College here in South Portland, ME. Wesley Chisholm: (207) 805-0028 or weslihtc@gmail.com Dan Warren: (207) 805-0933 or dwarren@spectrumlihtcom

4. It is always exciting to share news of promotions and new hires. Unfortunately, we are also losing a member of our staff who has been with us since 2009.  Melissa Flavell has given her notice and, while we have been very fortunate to have her part of our team for so long, we will miss working with her. Melissa has impressed many people throughout the industry with her dedication to providing compliance services of a very high caliber. She has been a terrifically dependable employee and many clients have expressed to me how grateful they are with the quality and care of her work. Hers will be large shoes to fill. Good luck with your next endeavor!

5. Tami Peterson has recently been hired by Spectrum as a full time Compliance Analyst. Tami has worked locally in Southern Maine for over 15 years in various affordable housing programs including HUD, HOME, LIHTC, and USDA. Most of her time was spent working for a public housing authority and she is extremely knowledgeable on LIHTC properties with mixed funding. Tammi: tpeterson@spectrumlihtc.com

6. In 2015 we were fortunate to add 2 additional Compliance Analysts to our company. Both Jennifer Guptill and Carolyn Price joined our team last year bringing with them a strong background in LIHTC compliance auditing. They both have worked extensively to properties in several states and with multiple sources of funding. Jennifer: (207) 805-0024 or jenlihtc@gmail.com, Carolyn: (207) 805-0041 or carolynlihtc@gmail.com.

Recertify your C3P Status Now!

November 24th, 2015

It is that time again!  Time to send in your C3P recertification renewal forms.  If you have your C3P (or above) you are eligible to receritfy.  Even if you havnen’t done it in a few years, you are still eligible.  All we need is a copy of the renewal form, the renewal fee and proof that you have taken at least 3 hours of continuing education during the 2015 calendar year.

Here is the link to the form.

If you need to take a continuing education course we have a 3 hour LIHTC brush up video that will qualify you.  The course is $195, and the $50 renewal fee is waived.

FAQ About C3P Renewal

What if I earned my C3P this year (2015)?

You will be eligible for your C4P certificate in 2016.  Keep track of any training you take and submit at the end of next year.

How much does it cost?

The renewal fee is $50.  However, if you have taken a training class with Spectrum during the 2015 calendar year your fee is waived.  All you  need to do is note that on your renewal form.  

Why should I recertify?  

It is not required but it does show that you are keeping up with your continuing education.  Many companies require employees to show they are current with their certificates.  

How do I submit my recertification form?  

You can mail it to our home office or you can email it to: admin@spectrumseminars.com .  

When will I receive my new certificate?

The certificates go out by the end of January.  

I’m getting back into the business and I haven’t updated my certificate in a few years.  How do I recertify?

No problem!  Although you do need to show that you have taken at least 3 hours of continuing education to qualify you can still update your certificate.  Please note, we cannot bump you up more than one number per year.

What qualifies as continuing education?

We need proof that you are continuing to learn and hone your skills.  We will accept any LIHTC training, Fair Housing, Real Estate renewals and anything you can relate to the Tax Credit program.  Don’t forget we offer a 3 hour online training that qualifies you!  If you have any doubts, contact me!

Questions? Email: admin@spectrumseminars.com or call 207-767-8000 x201.

Thank you NEAHMA

November 5th, 2015

Written by Edward Clark, Spectrum Enterprises

The October NEAHMA conference held in Randolph, MA this past week. They were kind enough to ask me again to participate in there agency update forum.  NEAHMA puts on this show every year and every year attendees have the opportunity to become better informed, and better prepared to address issues pertinent to the affordable housing industry. It’s a great conference, and I get out of the office for the day.

This time they took me by surprise and gave me their “Industry Partner of the Year” award. Nancy Hogan of NEAMHA said kind words about my responsiveness to questions and common sense answers. Honestly, I wish I had a transcript just to prove to my children that some people think I am smart. Whenever I say I am smart, they just roll their eyes.

So let me take this opportunity to give a very sincere THANK YOU to this organization for their acknowledgment. It was very flattering to be recognized by people I hold in such high regard.


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