The owners of certain tax credit apartment properties are not complying with HUD regulations

Welcome to this site that is written by Citizens for Fair Treatment of Applicants To tax Credit Affordable Housing Apartment Programs. We hope to start a chapter in every state and city to help assure applicants are treated in a fair and professional manner. I will be explaining the various types of HUD tax credit housing; some of the programs are run strictly by HUD 100% government funded; other tax credit apartments are funded by local, state, federal, and private monies. I will be using as an example the tax credit privately run and publicly funded Rittenhouse Square (Los Angeles, CA) operated by Thomas Safran Associates. The tax credit apartment power tree starts with the Internal Revenue Service, Housing and Urban Development (“HUD”), and each state’s agency responsible for allocating the tax credits and making sure apartment building owners comply with the code of federal regulations and as stated in HUD’s 4350 compliance manual. There are thousands of properties across the country; many are newly built with modern furnishings and look more like condos than “affordable” “low income” housing. If your income is low enough (family, individual, senior, etc.) you may able to move into an apartment for rent of $800 per month but valued at over $1600. The purpose of our site is to examine the HUD income exclusions that must be made to the calculation of annual income. I want applicants to be prepared when they interview. I want applicants to know what type of income must not be included in order to get an apartment. I have observed a pattern and practice that indicates to me the owners of certain tax credit properties are not complying with the HUD regulations, to the detriment of otherwise income qualified residents. In the meantime a good overview of the tax credit program appears at low-income-housing-tax-credit wikipedia.org.

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One response to “The owners of certain tax credit apartment properties are not complying with HUD regulations

  1. To apply for affordable tax credit housing apartments, each city will have a list available thru the city’s housing department website. There may be long waiting lists for some apartments so ride around and find buildings still in the construction stages. The HUD compliance manual 4350 (available on the internet) and 24 CFR 5.609 lists about 16 types of income that must be excluded. The correct determination of income will not only effect whether you get an apartment but also how much rent you will pay. Overtime and bonuses that are sporadic must be excluded. Here are some excerpts from the HUD website on the exclusion of sporadic income and treatment of overtime (and bonuses): from “General Income and Rent Determination Frequently Asked Questions” HUD-

    7. Question: Is there a handbook or regulatory citation that requires PHAs to use 52 weeks as the multiplier for the number of weeks worked per year? If a person works part-time, can his or her annual income be determined by multiplying weekly income by 50, rather than 52, because of an assumed two week unpaid vacation?

    Answer: As defined in 24 CFR 5.609, annual income means all amounts, monetary or not, which are anticipated to be received from a source outside the family during the 12-month period following admission or annual reexamination. Therefore, all ‘verified’ hourly, weekly, bi-weekly, semi-weekly, or monthly wages, earnings, or benefits must be annualized in order to determine annual income. If an applicant or participant is paid on a weekly basis, then his or her weekly earnings must be multiplied by 52 (weeks in a year) in order to annualize the income. If it can be verified that the individual only works and gets paid for a certain number of weeks per year, that information can and should be considered when annualizing the income. However, a PHA should not be arbitrary in adopting a method for calculating income or assume circumstances that may or may not apply.

    17. Question: What is considered temporary or sporadic income?

    Answer: The regulation, 24 CFR 5.609(c)(9), does not define temporary or sporadic income. Therefore, PHAs must determine what is considered temporary or sporadic income, and define it in their policies. Generally, amounts that are neither reliable nor periodic are considered sporadic, and should be excluded from annual income.

    from HUD page “Asessing Income Information: anticipating income”

    In the case of overtime, it is important to clarify whether overtime is sporadic or a predictable component of an employee’s income. If it is determined that an applicant has earned and will continue to earn overtime pay on a regular basis, PJs should calculate the average amount of overtime pay earned by the applicant over the pay period the PJ is using to calculate income eligibility (3 months or 12 months). This average amount is then to be added to the total amount of projected earned income over the following 12-month period.

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