HOME HSF OCCUPANCY TRAINING RENTAL

1
HOME/ HSFOCCUPANCY TRAINING (RENTAL)

• Massachusetts Department of Housing
• and
• Community Development (DHCD)
• June, 2008
• Prepared by DHCD and OKM Associates and revised
  further by FinePoint and DHCD

2
Rental Activities

• Acquisition only
• New Construction
• Acquisition and Rehabilitation
• Also rental units as part of FTHB assistance and
  production

3
Property Standards

• Acquisition only
• State/local code (includes Lead Based Paint)
• Section 8 Housing Quality Standards (HQS)
• Smoke detectors and CO detectors

4
Property Standards (cont.)

• Rehabilitation
• Applicable state and local code
• Written rehab standards
• HUD Housing Quality Standards (HQS)
• New construction
• C of O
• State/local code and HQS
• Model Energy Code/Energy Star (new construction
  up to 3 stories-or as applicable to an eligible
  project must be certified to Energy Star rating
  of 86)

5
Property Standards (cont.)

• Lead Based Paint (24CFR part 35)
• Project commitments after 9/15/00
• Test disturbed surfaces
• Risk assessments interim controls (5k)
• Abatement (25k)
• Lead must be addressed to meet the HUD federal
  regulations at 24 CFR Part 35 and the
  Massachusetts Lead Law whether or not children
  under six will reside at the property

6
Property Standards (cont.)

• Healthy Homes intervention in 4 areas that can
  be expected to help children
• Excess Moisture
• Dust
• Ventilation and control of toxins
• Education

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Other Standards

• Accessibility (Section 504 / ADA / MAAB, etc.)
  requirements may apply
• Fair Housing applies to all new construction
• Also rehabilitation, except for Accessibility if
  under 15 units

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Section 504

• New Construction
• 5 of units (not lt1) accessibility to mobility
  impaired
• in addition, 2 of units (not lt1) accessible to
  sensory impaired
• Substantial Rehabilitation projects
• Accessible units trigger at 15 units and/or if
  cost of rehab is 75 or more of replacement cost
• Its desirable to create accessibility even if
  the Federal or State requirements dont trigger
  physical accessibility
• Program must be accessible as well as units

9
Affirmative Marketing/ Fair Housing

• Before any project marketing begins
• Must analyze the market and assess which groups
  are least likely to apply
• How will you reach them?

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Affirmative / Fair Housing

• Efforts to attract those who may not normally
  apply
• Wait list
• Written TSMP
• Advertise in Mass Access for accessible units
• www.Massaccesshousingregistry.org
• Use HUD Logos (EHO, etc.) in all advertising
• Metro Boston- use Metro List for initial
  marketing
• 617-635-3321
• Advertise regionally as well as locally

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Affirmative Marketing/ Fair Housing (cont.)
Limited English Proficiency

• On August 11, 2000, Executive Order 13166, titled
  "Improving Access to Services by Persons with
  Limited English Proficiency, was issued. Final
  guidance was issued effective February 21, 2007.

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LEP

• Executive Order 13166 requires that
  administrators of federal funding assess and
  address the needs of otherwise eligible persons
  seeking access to federally conducted programs
  and activities who, due to LEP cannot fully and
  equally participate in or benefit from those
  programs and activities.
• http//www.lep.gov/ISpeakCards2004.pdf
• http//www.hud.gov/offices/fheo/promotingfh/leptra
  nslated.cfm

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Four Factor Analysis

• Whether and at what point the importance of the
  service, benefit, or activity involved warrants
  written translations of commonly used forms into
  frequently encountered languages other than
  English
• Whether the nature of the information sought
  warrants written translations of commonly used
  forms into frequently encountered languages other
  than English

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Four Factor Analysis

• Whether the number or proportion of LEP persons
  served warrants written translations of commonly
  used forms into frequently encountered languages
  other than English and
• Whether the demographics of the eligible
  population are specific to the situations for
  which the need for language services is being
  evaluated. In many cases, use of the "safe
  harbor" would mean provision of written language
  services when marketing to the eligible LEP
  population within the market area. However, when
  the actual population served (e.g., occupants of,
  or applicants to, the housing project) is used to
  determine the need for written translation
  services, written translations may not be
  necessary.

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Methods for Oral Communication

• Share language services between sites
• Train bilingual staff to act as interpreters
• Telephone and Video Conferencing interpreter
  services ATT for emergencies
• Tapes and Audio Files
• Community volunteers (make formal agreements)

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Written Translation

• Standardize documents to reduce translation needs
• Translate an entire document
• Translate a short description of the document
• Provide a statement in various languages that
  says If you dont understand this document we
  will provide you oral translation at no cost to
  you
• Consider using a professional translator to
  proof/ensure accurate translation if bi-lingual
  staff is used to translate documents.

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Documents to be Translated

• Vital documents are those that are critical for
  ensuring meaningful access by applicants and
  households served, and LEP persons specifically
• Determine what documents and identify them in a
  Language Access Plan (LAP)
• Notices of free language assistance
• Applications
• Written notices of rights, denial, loss or
  decreases in benefits or services (including
  recertification notices)
• 30 Day Notices
• Outreach/marketing materials

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18
Safe HARBOR for Written Translation
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Determining HOME/HSF-Assisted Units

• Only units receiving HOME/HSF are subject to
  HOME requirements
• Number of HOME/HSF units are specified at project
  commitment
• For properties with HOME/HSF and non-HOME/HSF
  units, units will be fixed or floating
  HOME/HSF units and will be designated as such in
  your loan documents.
• Also- distribution of assisted units by bedroom
  size in loan documents

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Fixed Floating Units

• All units in this building are 2 bedroom units
• Fixed 1A, 2B, 3A always HOME/HSF units
• Floating unit numbers change but always have 3
  HOME/HSF units

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VLI and LI units

• For DHCD HOME Units Only (HSF does not have a VLI
  requirement, per se, but often looks for lower
  targeting)
• All assisted units reserved for households at or
  below 80 AMI (LI)
• If 5 or more assisted units) then, at least 20
  of the HOME households must be at/below 50 AMI
  (VLI)
• 100 of occupants at move-in must be at no more
  than 60 AMI throughout the affordability period

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A HOME Rental Project...
LI
LI
LI
VLI
LI
LI
LI
VLI
LI
LI
23
HOME/HSF Rents

• Rent limits
• HSF does not have VLI requirement, per se, but a
  particular deal may have been structured with
  lower targeting
• VLI units rent is 30 at 50 or FMR, whichever
  is lower
• Project based rental assistance exception
• LI units rent is 30 at 65 or FMR, whichever is
  lower
• Household income must be at or below 60 of AMI

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HOME/HSF Rents (cont.)

• All rents adjusted for tenant-paid utilities
• Use local PHA utility allowance schedule
• Rents adjusted annually by HUD
• Link on HOME home-page
• DHCD eSource will notify you, as well
• Have You Subscribed to DHCD e-Source????
• To subscribe send a blank email to
• join-dhcd-housingdevelopment_at_listserv.state.ma.us

25
HOME Program VLI units and rental subsidies

• Only for project-based subsidies AND if both of
  the following conditions are true
• The household pays no more than 30 of adjusted
  income toward rent, and
• The unit is a VLI unit with the HH at or below
  50 of AMI
• Then the gross rent is the rent allowable under
  the project-based subsidy program

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HOME VLI units and rental subsidies (cont.)

• If the households income goes above 50 AMI, the
  unit is no longer a VLI unit. Therefore,
  collected rents cannot exceed High HOME rent
  limit and the subsidy portion may need to be
  reduced.

27
HOME VLI units and rental subsidies (cont.)

• Tenant-based rental subsidies
• The maximum rent (total paid on unit) is no more
  than the HOME rent
• If you are counting the household as part of your
  VLI-required units, the rent cannot exceed the
  Low HOME rent limit. However, if you are able to
  count the unit within your High HOME units, the
  property can collect up to the High HOME rent
  limit.

28
HSF Units and Rental Subsidies

• Typically, HSF is more flexible with
  project-based and tenant-based vouchers.
• Look at the Propertys Affordable Housing
  Restriction to see what parameters were defined.

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Initial Income Eligibility

• To determine eligibility, HUD allows use of 1 of
  3 income definitions (PJ determines which one)
• CFR 24 Part 5 (Section 8) definition is DHCDs
  required definition for determining income
• Others definitions
• Adjusted gross income defined by IRS for IRS Form
  1040
• Annual income as reported on Census long form

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Application for Housing

• An application that covers all areas
• Size of unit requested
• Size of household (ages, student status)
• Signed and dated by applicant
• Household income from ALL sources
• Any changes in income expected in next 12 months?
• Assets of all kinds for all household members
• Any lump sum?
• Any dispossession of assets in last 2 years?
• Remember to include all possible types of
  income/assets on application to avoid surprises
  (see hand-out)

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Income Documentation

• If you use paystubs and other source documents
  
• WAKE UP
• AND LISTEN!
• Guidelines on how much documentation is required

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Income Documentation

• Wages/Public Assistance/Pension/Child Support,
  etc.
• Third Party Verification is first choice but
  compare to paystubs to assess consistency.
• Source Doc (only if 3rd party is not available)
• Steady (salaried) employment THREE CONSECUTIVE
  MONTHS
• Less Steady (seasonal, hourly workers) ENTIRE 12
  MONTHS
• Affidavits to prove negative such as no income,
  no child support, etc.
• Must include under penalties of perjury and
  must be notarized or witnessed.

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Income Documentation (cont.)

• Income from Assets
• 5,000 or less verify amount of asset
• And use actual income from the asset
• Above 5,000 verify amount of the asset
• And use the larger of actual income from the
  assets or the imputed asset income (using current
  passbook interest rate which is currently 1)
• Disposition of Assets for less than Fair Market
  Value
• In essence, applicant has voluntarily reduced
  their ability to afford housing. Therefore, an
  imputed rate must be calculated and added as
  income from assets

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Income Documentation (cont.)

• Students 18 and over
• Verify full-time student status
• Verify and document all income and assets
• If documented as a student, and NOT Head of
  Household or spouse, then income capped at
  480/year
• Minors earned income (under 18 yrs) is not
  counted
• However, unearned income attributable to a minor,
  e.g., child support, TANF payments, income from
  bank accounts, and other benefits paid on behalf
  of a minor must be included

35
Annual Income Re-examinations

• Annually, tenant income must be re-examined (same
  process as initial certification)
• Review 3rd party verification
• Get written statement from another means-tested
  government program - If not available, then
• Source documentation (remember many months of
  info required if pay stubs used)
• Income info stale at 6 months
• Use effective date of recertification

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HUD HOME Income Calculator

• http//www.hud.gov/offices/cpd/affordablehousing/t
  raining/web/calculator/calculator.cfm
• This is on HUDs Home Page HOME under the
  HOME Tools along the left side of the page.

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The Purple Book

• Official Name Technical Guide for Determining
  Income and Allowances for the HOME Program
• Available FREE at Community Connections
• COMMUNITY CONNECTIONS P.O. Box 7189,
  Gaithersburg, MD 20898-7189 Telephone
  1-800-998-9999  
• TDD 1-800-483-2209 Fax [phone]
• www.comcon.org
• www.hud.gov/offices/cpd/affordablehousing/library/
  modelguides/1780.pdf

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Increases in Tenant Income

• If the income of a tenant in Low HOME (VLI) unit
  increases up to 80 of AMI
• May increase rent to High HOME rent level (when
  lease allows)
• Must rent the next HOME-assisted unit (fixed
  projects) or next available unit (floating
  projects) at Low HOME rent. If the projects
  units float, you may allocate the Low HOME status
  to a VLI-eligible household, if there is one
  available

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Increases in Tenant Income (cont.)

• If at recertification, the income of a tenant in
  a HOME/HSF unit exceeds 80 of AMI...

40
Increases in Tenant Income (cont.)

• Tenant may remain in HOME/HSF-assisted unit BUT
• (for HOME/HSF fixed units) Tenant must pay rent
  equal to 30 of adjusted monthly income.
• (for HOME/HSF floating units) Tenant must pay
  rent equal to 30 of adjusted monthly income up
  to the street or market rent level and next
  available unit rule applies.
• Units with HOME/HSF and LIHTC
• Rents are capped at the LIHTC Rent Limit

41
Rent and Occupancy Requirements

• Must be enforced for the term of the
  affordability period through
• Affordable Housing Restriction (AHR)
• May only be terminated upon transfer by deed or
  in lieu of foreclosure PJ must repay funds for
  units no longer affordable

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HOME/HSF Lease Terms

• Leases must be for at least 1 year, unless agreed
  upon by owner and tenant (DHCD requires 1 year
  lease in rare cases, waiver is allowed)
• Leases may not contain certain provisions
  (92.253b.)
• Owner may terminate tenancy with 30 days notice
  under certain conditions but may not terminate
  with less than 30 days notice
• Owners MUST adopt written tenant selection
  policies and criteria

43
Monitoring and Inspections

• PJs must verify compliance with HOME/HSF
  requirements each year
• On-site property inspections are required
• Every 3 years for projects with 1-4 units
• Every 2 years for projects with 5-25 units
• Each year for projects with 26 or more units

44
DHCD HOME/HSF Monitoring

• HSF Monitoring is conducted by OKM Associates,
  Inc
• HOME Monitoring is conducted by FinePoint
  Associates, LLC

45
DHCD Monitoring

• Ongoing rental compliance
• Site visits when inspections required
• Desk audits for projects in compliance in lieu of
  visit for years inspections not required

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Scheduling the Visit

• Monitoring agent will contact you at least two
  weeks in advance of visit
• An open book test we want you to pass
• youll get a copy of the monitoring guides
• youll have time to check your files
• you can call with questions

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Monitoring Visit

• Visit typically completed in 1 day/site
• Procedures
• 1. Interview and documentation review for
  financial and insurance issues, fair housing,
  etc.
• 2. Unit File Review (random sample of 20 of HAU
  files or at least 4)
• 3. On-site inspections (random sample of 20 of
  HAU, at least 4 and 1 per building. Also common
  areas and building systems)

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Findings Recommendations

• Monitoring letter issued by DHCD
• Findings
• Addresses statutory/regulatory violations
• Must cure/respond in 45 days
• Recommendations
• Address good practices
• No response required, but expect to see
  improvement next time

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Overlapping HOME/ HSF and LIHTC Rules

• Occupancy Requirements
• For 9 credit at least 40 of the units must be
  reserved for HH at/below 60 AMI
• Or, 20 of the units must be reserved for
  households at/below 50 AMI
• See your projects Regulatory Agreement!
• Rent requirements Rents cannot exceed either
  program limit

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Overlapping HOME/LIHTC Rules (cont.)

• Establishing tenant income eligibility
• Documentation same for both
• Definitions same for both- Part 5 / Section 8
  (Section 8 in LIHTC regs)
• Asset Income Use HOME verification requirements.
  
• Reexaminations of income
• Must be completed annually

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Overlapping HOME/LIHTC Rules (cont.)

• Over-Income Tenants
• HOME defers to LIHTC rent cannot exceed limits
  set by LIHTC until unit is replaced.
• HUD WEBSITE FOR COMBINING THE TWO
• http//www.hud.gov/offices/cpd/affordablehousing/t
  raining/web/lihtc/complying/together.cfm

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Other Federal Requirements

• Davis-Bacon labor standards
• 12 or more HAUs require federal prevailing wage
  rates (Davis Bacon). Sufficient documentation
  must be maintained in the project files.
• Relocation
• All the Right Moves (HUD website) for help in the
  Uniform Relocation Act (Barney Frank Rule)
• Must follow URA and pay benefits if building is
  to be demolished or if tenants (commercial or
  residential) have to be relocated as a result of
  your action

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Other Federal Requirements (cont.)

• Conflict of Interest (24CFR Part 92.359)
• No one associated with project may obtain
  financial interest in contract or subcontract
• Persons include themselves, or those with whom
  they have business or family ties during their
  tenure or for one year thereafter
• Includes employee, agent, consultant, officer, or
  elected official or appointed official of the
  organization receiving the funds

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Other Federal Requirements (cont.)

• Conflict of Interest (24CFR Part 92.359) (cont.)
• EXCEPTION On behalf of an awardee, DHCD may
  request an exception from HUD. It may be granted
  on a case by case basis when HUD determines that
  the exception will serve to further the purposes
  of the HOME program and the effective and
  efficient administration of the project or
  program. (For HSF, awardee should request
  exception from DHCD)

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Other Federal Requirements (cont.)

• Minority and woman owned business enterprises
  (M/WBE)
• Section 3 local companies and local LI workers
• Thresholds for Section 3 requirements
• Projects for which HUDs share of project costs
  exceeds 200,000 and
• The contract or subcontract exceeds 100,000.

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Project Completion Report

• Updated now to include performance measurement
  data
• Properties must eventually report beneficiary
  data for units that may have been vacant on the
  date the initial project completion report was
  submitted.
• Web-Based Occupancy Reporting to DHCDIts here
• OKM and FinePoint to use and verify during
  monitoring visits

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Web Resources

• HUDs Home Page for HOME
• http//www.hud.gov/offices/cpd/affordablehousing/p
  rograms/home/
• DHCD e-SOURCE
• To subscribe send a blank email to
• join-dhcd-housingdevelopment_at_listserv.state.ma.us

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HOME Monitoring

• FinePoint Associates, LLC
• Elaine Nickerson
• 617.543.2204
• eknick_at_aol.com
• Lindsay Cohrs
• 508.340.8890
• lindsaycohrs_at_gmail.com

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HSF Monitoring

• OKM Associates, Inc.
• Contact information
• Judy Katz
• 617.742-8616 ext 102
• jakcbo_at_aol.com

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DHCD Contact Information

• HOME Rebecca Frawley, 617.573.1318
• Rebecca.Frawley_at_state.ma.us
• HSF Eric Alexander, 617.573.1310
• Eric.Alexander_at_state.ma.us
• Website www.mass.gov/dhcd