2015 SPECTRUM LIHTC TRAINING Maximizing Tax Credit Delivery on Acquisition/Rehabs Presented by Erik Whitton May 20, :15am – 11:45am

CONTACT INFO Erik Whitton x210 Download full article with reference links on CAHEC site or Spectrum Blog

ACQUISITION REHAB Introduce Spectrum Article Failure to maximize credits = result of poor communication May not be IRS noncompliance But will be costly to the property

ACQUISITION REHAB Key Issue: clear communication in early stages All parties must be involved HFA; Investor; Property Ownership; Property Manager Note the following items (at minimum):

ACQUISITION REHAB Date of Acquisition Timing of Construction Will tenants relocate? What is 1 st Credit Year? What is Minimum Set Aside?

ACQUISITION REHAB How Many LIHTC Units; How many MKT? What Credit Delivery Promised to Investor? How is “Project” Defined (Multiple BINS Only) What Existing Tenants Won’t Qualify?

TENANT CERTIFICATION In Place Tenants: TIC Eff Date = Date of Acquisition Manager has 120 days to Complete If no Mgt Change – you have 120 days before *and* after DOA Do not back date paperwork or signatures

TENANT CERTIFICATION Anyone certified within 120 days gets IRS Safe Harbor treatment And, owner can claim credits as of DOA if rehab is done in the same year

TERMINATING TENANCY Some HH’s may not qualify Owner must have Good Cause to Evict or Not Renew Over-income is not good cause Notify tenants in writing of their right to remain in the unit Try to work out an incentive to vacate Must be voluntary

RESYNDICATION Income and Rent Limits May Decrease No Longer HERA or Hold Harmless Existing Tenants May Pay Less Rent

RESYNDICATION Existing Tenant Might Be Over Income “Grandfathered” Income Only! Rent Must Remain Restricted Cannot be Ineligible FT Students Original Move In File Must be Good!

Good Bye! Thank You! Have Fun!