All compliance and asset management forms and documents referenced in this section can be accessed at www.mhdc.com/docs/compliance.
Annual reporting allows MHDC to monitor compliance issues and verify adherence to the program requirements associated with development operations. These requirements are unique to the programs in use at the given development. MHDC Asset Management staff has compiled general and administrative guidance on compliance reporting that includes program information and the type of reporting required of each program.
The Tax Credit Program
Congress has delegated LIHTC administration to state housing agencies to assure good, quality housing will be available where it is most needed. This is the role MHDC fulfills. MHDC is charged not only with the allocation of LIHTC, but also with assuring compliance with the regulations. This includes the performance of a physical inspection of the property and a review of management and occupancy procedures during the Compliance Period and the Extended Use Period.
Under the provisions of the Tax Credit Accountability Act, all developers/applicants must complete all necessary forms and reporting required during the Application and allocation process and for a period of three years following the issuance of State LIHTCs by MHDC.
Tax Credit Program Reporting Requirements
LIHTC reporting requirements consist of Certification On‐Line Reporting (“COL”) and submission of the Owner’s Certificate of Continuing Program Compliance (Exhibit A). COL is an internet‐based data‐tracking system that has been designed for owners, agents, and managers to upload annual tenant activity on‐line. Owners must establish a username and password. Information regarding occupancy, rent
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and income limits, utility allowances, and applicable fractions is entered and various reports can be compiled from entered data.
The owner’s Certificate of Continuing Program Compliance must be printed from COL, signed by the owner, notarized and mailed to MHDC. Upon submission, this specific Exhibit A is stored virtually at MHDC and is used thereafter for all pertinent business.
The HOME Program
MHDC Asset Management is responsible for ensuring the ongoing compliance of rental housing that has been financed by MHDC using HOME Funds. This includes ensuring owners of such housing are complying with the income limits, rent restrictions, physical condition standards, and other compliance issues specified by federal HOME guidelines to meet the housing needs of low and very low income Missouri households.
HOME Program Reporting Requirements
The Home Program reporting requirements for rental housing financed with only HOME Funds differ from the requirements of a property financed with both HOME Funds and LIHTCs.
For developments financed with HOME Funds without LIHTCs, the reporting consists of submission of the Annual Certification of Continuing Program Compliance (Exhibit K) and the Annual Occupancy Report (Exhibit H). A hard copy of Exhibit H must be submitted to MHDC each year no later than close of business on March 31. In addition, an accurate, current utility allowance is required to be updated and submitted to MHDC on an annual basis in conjunction with these annual reports.
The annual reporting requirement for developments financed with HOME Funds and LIHTC must be done through COL, in accordance with the Seasonal Reporting Schedule which is based on the year the last building is placed‐in‐service. The original, executed copy of the Annual Certification of Continuing Program Compliance (Exhibit K) must still be provided in the hard copy format along with an accurate, current utility allowance.
(Seasonal Reporting Schedule)
SEASONAL REPORTING SCHEDULE
Placed-In-Service Date Activity Period Covered COL Report
Due Date Exhibit A & K Due Date 1990, 1991, 1992, 1993, 2006, 2010, 2014, 2018 April 1 – March 31 April 15 April 30 1994, 1995, 1996, 1997, 2007, 2011, 2015 July 1 – June 30 July 15 July 31 1998, 1999, 2000, 2001,
2008, 2012, 2016 October 1 – September 30 October 15 October 31 2002, 2003, 2004, 2005,
2009, 2013, 2017
January 1 – December 31
January 15 January 31
In some instances, this could cause reporting for a partial year in order to catch up to the appropriate schedule.
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Asset Management
MHDC administers a wide array of affordable housing programs and monitors these developments for compliance from inception, through the Compliance Period, including the Extended Use Period. As administrator of the affordable housing programs for Missouri, MHDC is your direct source for assistance and guidance regarding specific program requirements and obligations.
As a function of monitoring compliance with our programs, Asset Management will ensure all parties are aware of and in compliance with the Suspension/Debarment Guidelines (4 CSR 170 8.010‐8.160, as may be amended from time‐to‐time).
Suspension and debarment actions protect MHDC from doing business with individuals and companies who pose a business risk to the integrity and resources of the programs MHDC administers. All applicants and participants must be in good standing and compliant with all MHDC requirements. In making suspension and debarment decisions, MHDC relies on information provided by and on behalf of the applicant, portfolio reviews, and physical and file inspections. MHDC staff’s review of documents, assurances and certifications will be submitted in connection with the suspension and debarment process.
Events that will result in suspension/debarment recommendations:
1. General partner/managing member/sole stockholder that has been removed from the ownership entity of a previous development due to poor performance/malfeasance. Subject to verification of circumstances surrounding removal.
2. Uncured event of default per section 1602 of Tax Credit Assistance Program.
3. Fair Housing Act violations involving a finding of discrimination by an adverse final decision from a federal court or a judgment enforcing the terms of a consent decree. 4. Civil Rights Act violations involving a finding of discrimination by an adverse final
decision from a federal court or a judgment enforcing the terms of a consent decree. 5. Foreclosure involving loss of units to the affordable housing stock or failure to notify
MHDC of foreclosure (including deed in lieu of foreclosure transaction). 6. Claiming tax credits by submitting falsified IRS Form(s) 8609 to the IRS. 7. Misrepresentation of eligibility items.
8. Failure to fulfill commitments made in the initial application.
9. A pattern of uncorrected 8823s based on a review of the portfolio for the participant and the timeframe of the issuance of the 8823s
10. Portfolio has a history over the past three years of occupancy below 85%.
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12. General partner/managing member/sole stockholder is on HUD’s debarred list or has received a limited denial of participation in the past five years.
13. General partner/managing member/sole stockholder is currently or has been on any state housing agency’s debarred list in the past five years.
The initial set‐up for each development is a very important aspect of ensuring compliance for participating owner/agent entities. Proper set‐up allows for open and direct communications with MHDC and ensures information regarding the property’s compliance and program obligations can be relayed and maintained. The following outlines the steps for initial property set‐ups.
Lease
Up
Providing accurate and current contact information for your development and owner/management entity along with filing the various required authorization forms allowing MHDC to request and conduct business is vital. Once initial authorization forms are submitted, the initial lease‐up information must be submitted. This information allows MHDC staff to establish the timeframe for monitoring compliance moving forward.
First Certificate of Occupancy
In order to claim the LIHTC, all developments receiving a LIHTC allocation since 1987 must comply with all eligibility requirements for the Compliance Period which begins with the first taxable year of a building's Credit Period. The Credit Period for a building begins in either the year it is placed in service or the first year after, as declared in Part II of the IRS Form 8609.
Notification of First Unit Occupancy Date
To enable MHDC staff to determine a property’s final year of LIHTC program compliance, MHDC staff must be provided with a copy of the First Year Certification Part II of IRS Form 8609, as executed by the owner and filed with the IRS. MHDC staff must also be provided with a copy of the First Year Certification Part II of the Missouri Eligibility Statement. If these documents are not provided, MHDC will require the development to remain in the program through December 31st of the
sixteenth year, for credit allocations made in 1990 and thereafter.
Establish Username and Password for MHDC Asset Management Reporting Systems (AMRS)
Monitoring is designed to determine if the development is in compliance with federal and state regulations and with MHDC policies. However, compliance is solely the responsibility of the owner and is necessary to retain and use the LIHTC.
Latent Defect Inspections
Each new construction and substantial rehabilitation development with an MHDC construction loan is subject to Latent Defect Inspection (“LDI”) upon completion of construction. MHDC staff will establish an LDI date and notify all parties. The LDI will be performed by MHDC representatives in conjunction with the architect, general contractor, and property manager. The owner/management agent entity
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will be responsible for notifying residents with the proper inspection notifications, per program guidelines. The LDI inspection has the specific parameters as set forth below.
Timeframe for LDI Inspections
Each development must be inspected for latent defects within nine months from the reported final construction date. Any alterations to this date must be properly reported to MHDC so alterations in the LDI timeframes can equally reflect those changes. Failure to report and verify changes are the responsibility of the owner/agent and their general contractor. Prior to a representative’s visit, MHDC staff will provide official notice of the LDI via the Latent Defect Inspection Appointment Letter (Exhibit D).
Deficiency Resolutions and Penalties for Non‐Compliance
The LDI will be conducted with respect to the scope of the project and all construction rehabilitation requirements established in the original Application. Any defects observed during the LDI will be reported in detail and supported by photographs by the architect and provided to the owner/agent of record, with copies provided to the general contractor, as applicable. From the date of the inspection report, the owner/agent or designated representative has forty‐five (45) days to return certification and documentation supporting the mitigation of the deficient items or conditions cited in the LDI report. Failure to submit proper documentation supporting correction of each item cited will result in the issuance of a Form 8823 to the IRS reporting an action of non‐compliance by the owner/agent in question.