COMPLIANCE

PORTFOLIO MANAGEMENT | COVID-19 RESPONSE

A.  Property Operations

Q & A 

Q:  Can we close our amenities to prevent the spread of Coronavirus?

A:  During this pandemic, Management Companies and Owners have some discretion regarding the access and continued availability of amenities to their residents. Owners and Management Companies should consider CDC and Georgia Department of Public Health social distancing and COVID-19 guidelines.  If warranted, restricting access to amenities except laundry facilities, may be necessary. Per IRS guidance issued January 11, 2022 if an amenity or common area in a low-income building or project is temporarily unavailable or closed during some or all of the period from April 1, 2020 to December 31, 2022 in response to the COVID-19 pandemic, and not because of other noncompliance for § 42 purposes, this temporary closure does not result in a reduction of the eligible basis of the building. Properties should clearly document the reason for amenity or common area closure from April 1, 2020 to December 31, 2022.

Q:  During this uncertain time, can we utilize a one-page lease renewal form, instead of signing a whole new lease with our tenant?

A:  The one-page lease renewal would be acceptable it if refers back to the original lease agreements and addendums and does not require the tenant to waive rights from the original lease. Lease renewals must also capture regulatory requirements such as The Violence Against Women’s Act (VAWA).

Q:  Is DCA willing to provide the software, or should my company add/upload the document into the systems that is in place for application processing?

A:  DCA will not provide software.  Owners should use software that satisfies ESIGN Act and/or Uniform Electronic Transactions Act (UETA) requirements.

Q:   As we are looking into DocuSign or some equivalent there are going to be costs associated in processing our files.  Are we permitted to charge these “actual costs” to the residents?

A:  Actual cost should not be charged to residents. 

Q: Do you know if the agency is accepting electronic signatures at this time on the move-in pre-qualification paperwork due to COVID-19?

A:  Yes, please see DCA’s Electronic Signature Policy for additional guidance. DCA’s Housing Finance and Development Division (HFDD) will accept and permit the use of electronic signatures provided that 1) the electronic signature software has the capability to audit or authenticate the signature, and 2) there are no existing restrictions imposed by State or Federal law. A solution such as DocuSign or Adobe software, should be utilized in the signature process to satisfy ESIGN Act and/or Uniform Electronic Transactions Act (UETA) requirements. See DCA’s Electronic Signature Policy for additional guidance.

Q: Are we allowed to pass on service fees to residents for online rent payments?

A: Property owners and management companies may pass on service fees to residents for online rent payments, only if residents have other ways to pay rent, such as mail or drop box.  If the only option to pay rent is online and the resident is required to pay an online service fee, the online service fee is considered a mandatory cost, which must be deducted from gross rent. If the mandatory fee is not deducted from gross rent, the property is at risk of overcharging tenant rent, which is grounds for an immediate 8823, for which there is no cure.

DCA EXPECTATION:

1. Owners and property management companies to be as flexible as possible when determining rent collection methods, which means consideration for rent payment options that neither place an undue financial burden on residents nor put them in harm’s way. 
2. The service fee is passed through to the resident; there is no mark-up or profit on top of the assessed fee.

Q:  Can e-signature be used for all source documents not listed in your policy when determining household eligibility?

A:  DCA strongly encourages due diligence in authenticating source documents particularly for first year move in files. It is ultimately the Owner’s responsibility to ensure compliance. Although we do understand administrative burdens due to COVID-19, we do not want to encourage Owners to risk their ability to claim credits. 

Q: Does/will DCA allow the use of electronic file storage as recently authorized by HUD in Housing Notice 2020-04 or previously Revenue Procedure 97-22?

A: Please note that the recent HUD notice 2020-04 applies to multiple HUD multifamily programs, but specifically excludes HOME.

DCA’s LIHTC Compliance Manual states the following: “See Revenue Ruling 2004-82, published August 30, 2004, which clarifies that owners may comply with the record retention provisions under IRC Section 1.42-5(b) by using an electronic storage system instead of maintaining hardcopy (paper) books and records, provided that the electronic storage system satisfies the requirements of Revenue Procedure 97-22. Owners must maintain applicant and tenant information in a way to ensure confidentiality. Any applicant or tenant affected by negligent disclosure or improper use of information may bring a civil action for damages and seek other relief, as appropriate. Owners must dispose of records in a manner that will prevent any unauthorized access to personal information, e.g., pulverize, shred, etc.” (DCA LIHTC Compliance Manual Chapter 3.2 page 15)

Q:  My property is 100% LIHTC. Will DCA consider unconditional waiver recerts for 100% tax credit properties?

A:  Per IRS guidance issued July 1, 2020 and January 15, 2021, an Owner of a low-income building is not required to perform income recertifications under § 1.42-5( c)(1)(iii) in the period beginning on April 1, 2020, and ending on September 30, 2021. The Owner must resume the income recertifications as due under § 1.42-5( c)(1)(iii) October 1, 2021. DCA will require properties to document the reason for not performing a recertification during this time using this standard form. Income Recertifications that would have been due between April 1, 2020 and September 30, 2021 are not due on October 1, 2021. IRS has indicated that income recertifications due between April 1, 2020 and September 30, 2021 are simply waived. Please note, the IRS has not waived the annual student certification requirement.

Q:  Does DCA have the expectation for findings to be cured despite social distancing recommendations?

A:  DCA expects all partners to comply with current CDC guidelines. Owners should process all work orders observed during an inspection or as a result of a resident concern. Owners are expected to cure all findings, both health and safety and non-health and safety, to the extent possible while complying with current CDC guidelines.  

Q:  What is DCA’s position if we are unable to turn and lease vacant units due to social distancing restrictions?

A:  In accordance with IRS guidance issued July 1, 2020, January 15, 2021, and January 11, 2022 DCA is not required to conduct compliance-monitoring physical inspections in the period beginning April 1, 2020 and ending on June 30, 2022. DCA did not issue findings of non-compliance for the Vacant Unit Rule in the time period beginning April 1, 2020 and ending September 30, 2021. DCA has resumed compliance-monitoring file reviews as due under § 1.42-5.

Q:  Does the suspension of recerts for the specific time frame apply to all housing programs? 

A:  Per IRS guidance issued July 1, 2020 and January 15, 2021, an Owner of a low-income building is not required to perform income recertifications under § 1.42-5( c)(1)(iii) in the period beginning on April 1, 2020, and ending on September 30, 2021. The Owner must resume the income recertifications as due under § 1.42-5( c)(1)(iii) October 1, 2021. DCA will require properties to document the reason for not performing a recertification during this time using this standard form. Income Recertifications that would have been due between April 1, 2020 and September 30, 2021 are not due on October 1, 2021. IRS has indicated that income recertifications due between April 1, 2020 and Septebmer 30, 2021 are simply waived. Please note, the IRS has not waived the annual student certification requirement.

• Under the DCA HOME program HUD is permitting electronic signature on recertification or interim recertification documents IF the owner obtains an original “wet “signatures on the recertification/interim recertification documents at a later date. 
• HUD further states that tenants can also provide income documentation for the recertification process, (i.e. paystubs, SS/SSI/SSP awards, bank statements, public assistance documents, etc.) by email to the Owner/Agent at their discretion. This approach will allow owners/agents to conduct a temporary recertification using electronic versions of these documents and the owner/agent can collect the original documents from the tenant at a later date.

HUD MEMO:  ANNUAL AND INTERIM RECERTIFICATION PROTOCOL DURING COVID-19

DCA ELECTRONIC SIGNATURE POLICY

Q: Does DCA have a position on properties that have expired certifications or are unable to meet certain deadlines?

A:  In accordance with IRS guidance issued July 1, 2020, January 15, 2021, and January 11, 2022 DCA is not required to conduct compliance-monitoring file reviews in the period beginning April 1, 2020 and ending on December 31, 2021. DCA is not required to conduct compliance-monitoring physical inspections in the period beginning April 1, 2020 and ending on June 30, 2022. An Owner of a low-income building is not required to perform income recertifications under § 1.42-5( c)(1)(iii) in the period beginning on April 1, 2020, and ending on September 30, 2021. The Owner must resume the income recertifications as due under § 1.42-5( c)(1)(iii) October 1, 2021. Thus, DCA will not issue findings of non-compliance for late or incomplete recertifications for the time frame beginning on April 1, 2020 and ending on September 30, 2021. DCA will resume compliance-monitoring inspections and reviews as due under § 1.42-5.

Q: Does the July 1, 2020 IRS guidance apply to Exchange properties?
 

A: According to guidance from the Treasury 1602 Team on July 10, 2020, the IRS guidance issued on July 1, 2020 applies to the Section 1602 (Exchange) program as well. 

Q: An Owner of a low-income building is not required to perform income recertifications under § 1.42-5(c)(1)(iii) in the period beginning on April 1, 2020 and ending on December 31, 2020 according to IRS Notice 2020-53. How does this waiver affect the Acq/Rehab deals dealing with recertifying tenants within 120 days of acquisition to take advantage of the Safe Harbor?

A: Income recertification waivers as part of the IRS Notice 2020 – 53 do not apply to Acq/Rehab properties recertifying tenants within 120 days of acquisition. The 8823 guide considers these initial certifications. They are not waived.

INTERIM POLICY

B.  Calculating Rent and Income

Please continue to reference HUD Handbook 4350 and the IRS 8823 guide for income calculation methods as these have not changed.

Q & A 

Q. Social Security is telling us that they will not mail out or fax benefit letters due to COVID-19.  We have elderly residents that do not have internet access/or are comfortable setting up an online account.  Can we use the most recent SSI statement or the previous to calculate income?

A. The award letter residents received in 2019 stating 2020 benefits can be utilized for certifications effective in 2020. The award letter residents received in 2020 stating 2021 benefits can be utilized for certifications effective in 2021. 

Q.  Do we count the unemployment benefit for 12 months or should it be based on a resident returning to work within a couple of months (does this timing have to be clarified by the employer)?

A.  For Regular Unemployment Benefits:

For the purposes of income determination, unemployment benefits are included in the income calculation. For 100% LIHTC properties, use the date provided in the tenant’s unemployment letter and the tenant’s Unemployment Affidavit to calculate anticipated income for the next 12 months.  For HOME-funded properties, annualize the amount in the tenant’s unemployment letter to calculate anticipated income for the next 12 months. For further guidance, refer to the DCA Low Income Housing Tax Credit (LIHTC) Compliance Manual.

$1200 Stimulus Check:  This should be treated as a one-time gift, and not included as income.

$600 Additional Unemployment Benefit:  Per HUD guidance issued on May 1, 2020, this should not be included as income.

Q. Are residents allowed to self-certify a return to work date or income if the employer has closed due to COVID-19?

A. Unemployed residents should be allowed to submit an unemployment affidavit to verify current household income and expected return to work date when other reliable methods are not able to be obtained. Please continue to use existing standards established in the 8823 Guideline and the HUD 4350.3 until additional federal guidance is released.

Q.  Should we verify/count any income from their employment prior to COVID-19?

A.  Anticipated income for the next 12 months should be calculated using existing program standards until additional federal guidance is released.

Q: How should we calculate the additional unemployment income of $600/week included in the stimulus package signed on Friday?

A:  Per HUD guidance issued on May 1, 2020, the additional $600/week unemployment benefit should not be included as income.

Q: We have an applicant that was receiving hazard pay at the height of the pandemic. The applicant is no longer receiving hazard pay. Since we do not count the $600 weekly federal pandemic unemployment compensation, are we able to exclude any temporary pay received due to pandemic?

         A. For income determination, temporary or irregular, nonrecurring monetary gifts or contributions to resident are not included in income.

C.  Regulation and Guidance

Q & A

Q:  Has HUD or DCA issued any guidance for Residents who find themselves unemployed and unable to pay rent?

A: The Supreme Court ruled on August 26 to end the temporary stay on a lower court ruling seeking to overturn the federal eviction moratorium issued by the Centers for Disease Control and Prevention (CDC) on August 3. This invalidates the CDC's previous Eviction Moratorium for nonpayment of rent and/or late fees. However, the CARES Act still requires multifamily LIHTC and HOME properties to provide 30-days notice to tenants prior to eviction. You may review properties subject to this requirement here. 

On June 24, 2021, the CDC extended the eviction moratorium through July 31, 2021. This is expected to be the final extension.  

On September 4, 2020, the CDC issued a temporary halt in residential evictions to prevent the spread of COVID-19 from September 4, 2020 to December 31, 2020. The Consolidated Appropriations Act, 2021, signed into law on December 27, 2020, extended the CDC eviction moratorium until January 31, 2021. The CDC eviction moratorium was subsequently extended to March 31, 2021 and June 30, 2021.

Previously, the Cares Act provided for the following two types of eviction moratoria:

• The Act halts evictions of renters living in single-family and multifamily properties with federally backed mortgages for 120 days after its enactment, regardless of whether the landlord receives forbearance.
• The Act halts evictions of renters from federally backed multifamily properties whose landlords receive forbearance, effective for the duration of the forbearance, which is capped at 90 days.

Q: Will DCA utilize any waivers available for HOME Participating Jurisdictions as announced by HUD on 4/10/20, particularly the waiver for income documentation that allows for self-certification of income?

A: DCA intends to utilize the waiver guidance published by HUD that allows the use of self certification of income in lieu of source documentation to determine eligibility to reside in a HOME-assisted unit for people impacted by COVID-19. A waiver of self-certification of income is allowable through 9/30/2021. Per HUD, DCA is required to audit affected files within 90-days of 9/30/2021. DCA will require owners and managing agents to collect the source documents from the tenant as soon as possible and no later than within 30 days of 9/30/2021. Properties intending to utilize the waiver must first complete the form here.

INTERIM POICY

Moratorium on Evictions

Update: 

The Supreme Court ruled on August 26 to end the temporary stay on a lower court ruling seeking to overturn the federal eviction moratorium issued by the Centers for Disease Control and Prevention (CDC) on August 3. This invalidates the CDC's previous Eviction Moratorium for nonpayment of rent and/or late fees. However, the CARES Act still requires multifamily LIHTC and HOME properties to provide 30-days notice to tenants prior to eviction. You may review properties subject to this requirement here.

On June 24, 2021, the CDC extended the eviction moratorium through July 31, 2021. This is expected to be the final extension.

Previous Update: On March 29, 2021, the CDC extended the eviction moratorium through June 30, 2021.  

Previous Update: On September 4, 2020, the CDC issued a temporary halt in residential evictions to prevent the spread of COVID-19 from September 4, 2020 to December 31, 2020. The Consolidated Appropriations Act, 2021, signed into law on December 27, 2020, extended the CDC eviction moratorium until January 31, 2021. The CDC eviction moratorium has been extended to March 31, 2021. 

The CARES Act eviction moratorium is applicable to the entire Georgia multi-family portfolio.  Under the CARES Act, for 120 days beginning March 25, 2020, owners of HUD-financed properties, or properties under which the Violence Against Women Act (VAWA) applies, may not evict a tenant for non-payment of rent.  DCA previously adopted and implemented application of VAWA to the Georgia portfolio (DCA LIHTC Compliance Manual, pg. 25).  Although, VAWA is a HUD-based program requirement, VAWA applies to all Georgia LIHTC properties.