2015 SPECTRUM LIHTC TRAINING Maximizing Tax Credit Delivery on Acquisition/Rehabs Presented by Erik Whitton May 20, 2015 10:15am – 11:45am.

2015 SPECTRUM LIHTC TRAINING

Maximizing Tax Credit Delivery on Acquisition/Rehabs

Presented by Erik Whitton

May 20, 2015

10:15am – 11:45am

CONTACT INFOErik Whitton

207-767-8000 x210

[email protected]

www.spectrumlihtc.com

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 1st 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!