x » Written by Erik Whitton, Spectrum Enterprises, *Revised PostingSpectrum Enterprises


Written by Erik Whitton, Spectrum Enterprises, *Revised Posting

Written by Erik Whitton, Spectrum Enterprises

Here are some recent items that LIHTC compliance professionals need to be aware of:

1.        Social Security Cost of Living Adjustment (COLA): The 2015 increase is 1.7% starting in December for all individuals receiving benefit income from the SSA.  Here is the news release: http://www.socialsecurity.gov/news/#!/post/10-2014-2

When completing initial or annual certifications please check to see if the income verification you have shows the 2015 amount.  Usually you will the phrase “Beginning December 2014…” and this indicates the 2015 amount is listed.  You can also check the date of the SS award letter.  Since the 2015 COLA was not announced until 10/22/2014 any letter dated before this will not show the 2015 amount.

If you are not seeing the 2015 amount on your verification please make sure to add 1.7% to the amount shown when completing the income calculation for the TIC form.

2.        Income & Rent Limits for 2015:  As a reminder, the new income and rent limits are expected sometime in December.   In preparation for this all staff should be educated on how to implement new income and rent limits at each site in their portfolio.  The HERA and Hold Harmless rules have made this very complicated and we see many sites that fail to use the correct income and rent limits.  This can lead to noncompliance due to allowing over income tenants to live at your site or due to charging too much rent.  Another risk is that you could be denying qualified applicants or charging lower rents than what you are allowed.  

Here is the the website to check daily in the month of December for the new amounts:  http://www.huduser.org/portal/datasets/mtsp.html

Here is a previous Spectrum article on how to retrieve your income and rent limits: http://www.spectrumlihtc.com/file-maintenance/2014-income-limits/

3.        Updated Passbook Savings Rate: When certifying a household with more than $5,000 in net assets you are required to compare the actual asset income with an imputed amount based on the passbook savings rate.  I’ve been doing this work for 15+ years and this rate has always been set at 2%.  However, there was a recent notice stating the rate would change to 0.06% for all initial and annual certifications effective on or after 02/01/2015.  Here is a link to the announcement: http://portal.hud.gov/hudportal/documents/huddoc?id=14-15hsgn.pdf

This is a big change that will lower the income you see on TIC forms for households whose assets exceed $5,000.  For example, if you certify a tenant with $25,000 in net assets such as bank accounts, real estate, and a 401k during the month of January 2015 your TIC form will show $500 in imputed asset income.  That same tenant would show only $15 in imputed asset income if they were certified in February 2015. 

Please make sure you spend some time between now and January to help your colleagues understand this change.  Please also make sure to obtain a TIC form showing the new rate.  I would expect state agencies will be updating the TIC form over the next few weeks to reflect the change.  If you use compliance software make sure you will receive the update so your TIC forms will be accurate. 

Spectrum has a few new training options available.  Did you know we offer a 3 hour online LIHTC training event?  You can use this to renew your c3p designation or any other annual training requirement.  Details are here: http://www.spectrumlihtc.com/training/spectrum-online-training/

We now offer S.T.A.R. online training for Rural Development.  Details here: http://www.spectrumseminars.com/courses/s-t-a-r-certification-seminar/

Look for the C3P coming online in January, too!

Finally, Spectrum will be holding another LIHTC Symposium in Portland, ME June 5, 2015.  The agenda will be somewhat smaller than previous symposiums which usually included 2 full days of training and events spread over 3 days.  We are calling this a mini-posium.  Details will be made available on the Seminars website as the plans are finalized: http://www.spectrumseminars.com/

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