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Shelter Plus Care: Use of Tax Credit Properties in the S+C Program Libby Tyre, Shelter Plus Care Coordinator September 2015
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Use of Tax Credit Properties in the S+C Program Shelter Plus Care can be used in a Low Income Housing Tax Credit (LIHTC) property. HOWEVER…
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Use of Tax Credit Properties in the S+C Program Most Shelter Plus Care in Georgia is “Sponsor-based Rental Assistance” Sponsor-based Rental Assistance (SRA) component Under the SRA component, an applicant may request grant funds to provide rental assistance through a contract(s) with a nonprofit organization(s), called a sponsor. The nonprofit organization may be a private nonprofit organization or a community mental health center established as a public nonprofit organization. The units to be used must be owned or leased by the sponsor.
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Use of Tax Credit Properties in the S+C Program Low Income Housing Tax Credit (LIHTC) Leases must be in the tenants name, not the sponsor. Sponsors must execute the lease addendum which is provided on the DCA website. www.dca.ga.gov/housing/specialneeds/programs/ShelterPlusCare_GranteesOnly.asp.
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Use of Tax Credit Properties in the S+C Program Sponsor must: Make sure that this LIHTC property is the ONLY property available that meets the S+C program requirements – contract configuration, availability, HQS, location, etc. Document due diligence in looking for an alternative property that is not LIHTC. Acknowledge the unit is a Tax Credit unit by marking “yes” on #4 of the HQS request form and attach all documentation showing due diligence. Be familiar with the restrictions placed on LIHTC properties. Complete the lease addendum provided on the DCA webpage.
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Use of Tax Credit Properties in the S+C Program Tax credit restrictions to understand: Leases must be executed by an eligible tenant, not by the Sponsor. Vacant units should not be “held” waiting for an eligible S+C tenant. The initial lease term must be at least six months. Thereafter, the lease can be a month to month basis. Master leases should not be utilized. Sponsors can execute a lease addendum which can be found on the DCA webpage. Continuation in the S+C program should not be a condition of the tenant’s lease. However, the tenant can be evicted if rent payments are not made to the property management company.
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Use of Tax Credit Properties in the S+C Program What to do now? Know whether you are currently using a Tax Credit property – do research as necessary. Send an email (to Libby) with a list of all properties currently used by your S+C program - due September 30, 2015. Identify each property as “Tax Credit” or “Not a Tax Credit”. For those that are Tax Credit, please confirm that you are using the correct leasing arrangements including the lease addendum. If the correct procedure is not being used, please provide a timeline for making these corrections.
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