x » Compliance IssuesSpectrum Enterprises

Archive for the ‘Compliance Issues’ Category

SOCIAL SECURITY COLA FOR 2018

Friday, 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.

 

A Few Tidbits from Wil at Spectrum

Thursday, October 15th, 2015

Written by Wil Whalen, Spectrum Enterprises

  1. There will be no cost-of-living (COLA) increase for Social Security this year. “With consumer prices down over the past year, monthly Social Security (SS) and Supplemental Security Income (SSI) benefits for nearly 65 million Americans will not automatically increase in 2016.” – ssa.gov  This means that managers will not be required to add an increased amount of SS or SSI to TICs this year.

 

  1. It’s always a good idea to compare a tenant’s first annual recertification file to the move-in file to see what has changed. This is particularly helpful when a tenant goes over the income limit at the first annual certification.  And if there are any changes in the file that would be cited by an auditor, place a clarification or note-to-file explaining the change.  It goes along with the old auditor adage, “If one page in a file raises a question, the next page should contain the answer.” 

 

  1. Calculation Sheets are your friends. One thing that makes my job easier as an auditor is when a file contains a calculation sheet.  This page is basically a summary sheet of all the calculation tapes in your file.  However, a common thing we find is instead of an actual calculation, we see is “Total x1 = Total.” ( ie: Employment – $31,200 x 1 = $31,200). As opposed to “Employment – $15 x 40 (hours) x 52 (weeks) = $31,200”.  This doesn’t show us your work or explain where you got your numbers.  Even if there is a calculation tape further on in the file, it’s helpful to show your work here as well.

 

  1. Winter is coming! According to the National Weather Service, El Nino is in full effect and it will be the strongest El Nino of the last 50 years.  This means good news for the Northeast – where I reside – and bad news for everywhere else!  California is expected to be much more active weather-wise this winter.  They will get significant precipitation in the form of both rain and snow.  This could result in mudslides and flooding, which is bad news for areas with recent burn scars from wildfires.  There will be less lake effect snow for the Great Lakes Region and a milder winter for the Northeast.  The Southeast can expect a much stormier winter than usual. They are expecting this to have a serious impact on weather throughout the all of North America, so pay close attention to your weather forecasts and plan accordingly.

 

  1. Flexibility is important on inspection/audit day. Keep in mind that most inspectors book multiple inspections/audits in one day.  In Massachusetts we do up to four or five smaller properties in a day.  We have a lot of ground to cover each quarter.  So this means we’re often running a few minutes late and even more often a few minutes early.  So be sure you provide your inspectors with good contact phone numbers so they can keep you updated on our status.  Also, it’s a good idea to give your inspectors information as to where they should park when they arrive.  This information can often be the difference between arriving on time and being late.  If they need to park in a public lot or garage blocks from the property, knowing this in advance will allow them to factor the time to park into their travel schedule.  We always do our best to be on time, but traffic and Mother Nature often work against us.  So being flexible on inspection day will make everyone’s lives a little easier.

 

  1. Happy Halloween.

HUD Tenant Demographic data and Spectrum’s End of Year Data Collection Software

Friday, September 18th, 2015

Written by Paul Perpich, Spectrum Enterprises

The 2014 Spectrum End of Year data collection cycle has been completed and the tenant demographic data has been submitted to HUD. The 2014 cycle marked the end of significant updates HUD has made over the past two years to the tenant demographic and income data that was collected as a result of the congressional mandate embodied in the 2008 Housing and Economic Recovery Act (HERA). For the most part the recent major updates that you saw in our End of Year (EOY) software, primarily version 5.0.0 and later, have been stabilized and you shouldn’t see any changes to the dataset for awhile.

In 2014 HUD published their first final report on the tenant demographic and income data that has been submitted to date and included only the 2012 collected data. The initial report on 2013 data was published earlier this summer. It became apparent early in the process that the effort required of HFAs, property owners and managers as well as management software system vendors to ramp up their systems and personnel to collect tenant demographic data that was previously not collected for tax credit compliance was significant. Consequently, HUD decided that the 2009 to 2011 data submitted was not suitable for publication.

One aspect of the data collection process that has been problematic for HUD and is something we’ll be continuing to focus on is the submission of incorrect Building Identification Numbers (BIN). For this past 2014 cycle we added information in the Building form in our software that provided information about the correct format for the BIN as well as a tool to check the format of the BIN that had been entered. While we provided this guidance we did not require that the BIN be correct and the file could be submitted to us with the incorrect BIN. Moving forward we’ll be stiffening the requirement to submit correct BINs.

For the 2015 collection cycle we will still allow incorrectly formatted BINs to be submitted to us but we will be providing a report of those properties that have submitted incorrect BINs to the state HFAs. That report will also include statistics on the completeness of the rest of the HUD required data that was submitted. Our expectation is that by the 2016 collection cycle report files with incorrect BINs will not be allowed to be submitted to us.

Importing data using XML

The ability to import data directly from property management software systems into the Spectrum EOY software has been steadily increasing since the introduction of the State Housing Finance Agency Low Income Housing Tax Credit Data Transfer Standard in 2006. The development of the standard has been sponsored by the National Affordable Housing Management Association (NAHMA) and is commonly referred to as the NAHMA LIHTC XML Data Transfer Standard.

Spectrum included the ability to import data using the XML standard in 2009 with version 3.1.1 of our software. After a slow start use of the XML standard has increased significantly over time with the greatest increase occurring during the past two years. Spectrum has been working closely with the standards group since inception of the standard and has taken a leadership role in working with the HUD and the standards group to ensure that the standard includes all of the data elements is HUD requesting as part of their Low-Income Housing Tax Credit (LIHTC) Tenant Demographic and Income Data Collection program.

Using the XML import process to move event data from a management software system to the EOY software is a quick and relatively easy process that once correctly setup eliminates the need to manually enter tenant demographic and income data into the EOY software. An entire year’s worth of data can be processed and moved in just a few minutes. The XML standard is supported by Yardi, Real Page and Boston Post (now MRI) as well as other vendors. If you’re not using the XML process and would like to learn more about it please contact me at EOYHelp@SpectrumLIHTC.com or 517-277-0120.

Here’s a breakdown by Spectrum monitored states of the use of the XML import process:

State

 Properties

Use XML

%

CA

2944

2151

73%

CT

234

111

47%

HI

84

29

35%

MA

651

433

67%

MD

375

285

76%

WV

242

142

59%

VI

24

9

38%

Totals:

4554

3160

69%

Important Reminders

Before submitting your EOY file to Spectrum please be sure to remember the following:

  1. Make sure the BIN numbers are correct (e.g. MA-12-00001) and match what’s on the 8609.
  2. Make sure the Placed in Service Date (PISD) is accurate (building form).
  3. Make sure the BIN address is complete and matches what’s on IRS form 8609 (building form).
  4. If you’re using XML to import data from your management system be sure to verify all the data that is not included in the XML import file such as the following:

– Management agent, owner and general partner data especially contact information

– All the property information, building and unit counts as well as the set aside information located in Property form.

  1. Missing TIC information to avoid 8823s
  2. Keep in mind that HUD is now requiring Live in Caretakers be reported on the TIC even though they aren’t included in the number of occupants count for the unit.
  3. Also keep in mind that all household members need to be entered not just the head of household.

HOME Final Rule – does it apply to your property?

Thursday, July 9th, 2015

Written by Lois Churchill, Spectrum Enterprises

You own or manage a property with HOME funding. The new Final Rule came out in August of 2013. Do the requirements in that rule apply to your property? At first glance most folks thought it only applied to new projects to which HOME funds were committed on or after 8/23/13 – we now know this to not be entirely true.

In January 2015 HUD provided an Applicability of Requirements chart to help determine what rules apply to what properties. There are three categories:

Category #1 are requirements to clarify or codify existing requirements. Those requirements are applicable to all HOME projects regardless of when funds were committed. Included in category #1 are types of housing that are excluded from the definition of housing and student qualifications.

Category #1 requirements specific to rental housing include items such as requirements of at least a one year lease (or less, if mutually agreed upon), fact that HOME rents include both rent and actual utilities or rent and the utility allowance; that PJs may designate more than the required minimum HOME units as Low-HOME units; that supportive services cannot be mandatory for tenants of HOME-assisted units (except supportive services provided in transitional housing), and tenant selection procedures.

Category #2 are new project requirements, applicable to all new projects to which HOME funds were committed on or after the effective date of the applicable requirement (typically 8/23/13). Items such as completion deadlines, property standards, conflict of interest regarding who may not live in a HOME unit, and initial PJ inspections for new properties are included in Category #2 requirements. Also shown in Category #2 but not yet effective is changeover to UPCS standards for physical inspections.

Category #2 requirements specific to rental housing include ability of a PJ to charge monitoring fees, requirement for capital needs assessments for rental projects with 26+ total units (not yet in effect), requirements for initial occupancy of vacant units, requirement that HOME agreements stipulate whether HOME units are fixed or floating, on-site inspection requirements. There are several requirements in this section of the New Rule that were to be effective 1/24/15 but have been further delayed.

Category #3 are new program requirements that are applicable to all HOME projects as of their effective dates (typically 8/23/13) regardless of when funds were committed.

Calculating For Additional Set Asides

Thursday, June 18th, 2015

Written by Jennifer Borland, Spectrum Enterprises

Many properties have included in the extended low income housing commitment set asides in addition to 40/60 or 20/50.  Most often Spectrum sees properties that include units set aside at 40%, 30%, 20%.  How are the income limits for these set asides calculated?

Given the 50% limits, determining additional set aside limits isn’t very hard:

40% = 50% x 0.8

30% = 50% x 0.6

20% = 50% x 0.4

Using limits for a property placed in service prior to 2009 in Portland, Maine:

            1 person           2 person           3 person          

50%     $27,300           $31,200           $35,100                      

            x     0.8            x     0.8            x     0.8

40%     $21,840           $24,960           $28,080

 

            1 person           2 person           3 person          

50%     $27,300           $31,200           $35,100                      

            x     0.6            x     0.6            x     0.6

30%     $16,380           $18,720           $21,060

 

            1 person           2 person           3 person          

50%     $27,300           $31,200           $35,100                      

            x     0.4            x     0.4            x     0.4

20%     $10,920           $12,480           $14,040

Spectrum recommends having your housing credit agency approve limits before implementing.

2015 HOME Limits

Monday, May 11th, 2015

HUD published the 2015 HOME income and rent limits on Friday. The go into effect on June 1, 2015.

Things to remember about HOME income and rent limits:

  1. There is no 45 day transition. You must begin using the new limits on the effective date;
  2. HOME limits are not “held harmless” like LIHTC limits. If HOME income limits go down, you must use the lower limits for both income and rent.

You can find the HOME limits either by following the link on our web site or directly at https://www.hudexchange.info/home/.

Elderly Housing

Thursday, May 7th, 2015

Written by Edward Clark, Spectrum Enterprises

The term “Elderly Housing” gets thrown around a lot. Too much in fact, because often we hear a property described as “Elderly Housing” when it doesn’t actually meet the requirements to be called that.

“We have an Elderly Preference” – Don’t we all? They pay the rent on time, their apartments are usually very tidy and at least half the time they smell a little like my grandmother.  There is no “Elderly Preference” in housing. You may target the elderly in your marketing by placing advertisements in the AARP newsletter or passing out flyers at the local bingo parlor but don’t let your staff tell people your property has an “Elderly Preference”. That could be seen as discouraging eligible households from applying.

Elderly housing is unique in that it is the only type of rental housing that can actually discriminate on the basis of familial status. Even that doesn’t mean you can deny people with children however. You need to understand the different types of elderly housing and what makes them different from each other. Here is a quick and easy to follow primmer:

1) Any housing that is recognized by the Secretary of HUD as “Elderly Housing”. At least the head or co-head must be handicapped OR disabled OR 62 years old or older. I put handicapped/disabled ahead of 62 or older because people sometimes assume a 25 year old in a wheelchair doesn’t belong in “Elderly Housing”. They do. It’s the law. Children are allowed as members of the household too.

2) 62 and older housing. This one is easy. Every resident must be 62 or older. No kids, no 25 year olds in wheelchairs. Today, if you weren’t alive the year the Korean War ended, you cannot move into this type of housing.

3) 55 and older housing. This provides the biggest pool of potential tenants, and the biggest potential to make a mistake. 80% of the units must be occupied by a head or co-head that is 55 or older. The remaining units can be occupied by anybody. Families with kids, people with disabilities, ugly people. They can all live here. That doesn’t mean you should rent up 20% of your units to people under 55 though. Instead, you need to track the make-up of your community to make sure you never fall below the 80% threshold. If an 86 year old man moves in with his 30 year old second wife (it could happen) and he dies while doing push-ups trying to impress her (will probably happen), the household no longer counts as a 55 and older household. So they moved in as part of your 80% but suddenly became a part of your 20% instead. Once the property drops below 80% the property is no longer elderly housing and is open to everyone regardless of age. 55 and older housing must also provide at least one service or amenity that benefits people of advancing age. Yoga classes, trips to the grocery store, a fitness room can all qualify.

I hope this helps. Now where did I leave my keys??

REMINDER – Check for Updated Compliance Forms

Friday, April 24th, 2015

Written by Erik Whitton, Spectrum Enterprises

A recent trend we are noting as we review tenant files is that many sites are using outdated forms.  Most state agencies provide forms such as Tenant Income Certifications (TIC), Income Verifications, and Affidavit forms.  While many of these forms are suggested; others are mandatory.  From time to time these forms are modified to reflect new rules or policies.  For example, the imputed asset rate changed in February 2015 which means most state agencies have updated their TIC forms to reflect the new rate. Other forms may have changed as well.  

Please make sure that properties in your portfolio are using the current version of all forms provided by your state agency.  Most state agencies maintain a website with all compliance materials such as forms, income/rent limits, and compliance manuals.  It is therefore very easy to compare the forms you are using with the current versions provided by the state agency.  Usually the forms have a date on the bottom of the form to indicate when they were  last updated.  

I would additionally suggest:

  • Reviewing any recent changes to your state compliance manual
  • Compare the income and rent limits in use at your sites with the figures provided by your state agency
  • See if the state is providing any compliance training seminars that you should participate in
  • See if you can subscribe to an email notification service to receive these types of updates

Please see our forms package here.

Spring Inspection & Clean Up!

Thursday, April 9th, 2015

Written by Cathy Turner, Spectrum Enterprises

It sure has been a difficult time to do property inspections in the east coast this winter.  So glad that Spring has finally arrived!  A special thanks goes out to the managers and maintenance personnel that braved the cold temperatures with me this winter. 

It is clear that due to the grueling winter conditions and stress on property budgets, managers had to focus all efforts on safety and snow/ice removal.  General site inspections and routine maintenance had to take a backseat.   Now that the weather is improving and temperatures are raising it is time to get back out on your properties.  It is time to take note of storm damage and make a plan for repairs.  Obviously, the big repair items such as roof damage are already in the works.  However, I am willing to bet that once you get out and walk the grounds and building areas, you will find many other projects needing attention sooner rather than later.     

Here are some of the items that I have noticed in my recent travels.

  • Look for tripping hazard on walkways and grounds. 
  • Repair potholes.
  • Pick up trash left under the melting snow.  Especially, broken glass. 
  • Check playgrounds.  Look for damaged equipment and sharp edges.
  • Look for fallen or hanging cable and telephone wires.
  • Look for damaged trees and vegetation. 
  • Walk all of the halls and look for water damage.  I have found many damaged ceilings in closets.
  • Check handicap parking spaces.  Be sure signage is not damaged or missing.
  • Repair fence damage. 
  • Look for damaged or missing window screens.
  • Storm doors can take a beating in the winter wind.  Be sure all doors properly close and latch.  Repair screens as needed.

If you want more ideas and suggestions for your properties spring clean up check out this blog by Laine Nadeau.

Impact of LIHTC Housing in the US

Friday, April 3rd, 2015

Written by Harold Tucker, Spectrum Enterprises

The LIHTC program is the most successful affordable housing program in U.S history. What does that mean? Does it simply mean the country has a lot of families living in affordable housing? Yes, but there is so much more! Besides providing thousands of affordable units to families the impact the LITHC program has on a community is much wider.

According to the NAHB (National Association of Home Builders) every 1,000 unit LIHTC apartment developed creates 1,130 jobs. A lot of those jobs are in the construction sector. Nationwide the LITHC program creates 95,700 jobs, $3.5 billion in federal, state and local taxes and $9.1 billion in economic income (wages and business income).

The benefits to the local area in service and trade, the food industry, health industry and education remain long after the LIHTC project is constructed.  Up to 30 jobs in each field remain in close proximity to the LIHTC project after construction.

A last thought. 90% of affordable housing is from the Low Income Tax Credit Housing program. 90%! How can this program not impact almost every city in the United States? Citizens everyday drive by LIHTC housing and don’t know it. The perception of affordable housing is often one of dilapidated buildings in crime ridden areas of the city. We who work in this housing field know this is not the case. The impact of the affordable housing program is wide across this country and we are all are part of it. 


Subscribe to Our Blog

 

 Subscribe in a reader