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Tax Credit Compliance Procedures Manual

The Tax Credit Compliance Procedures Manual was designed to give property owners and managers step-by step instructions on how to fulfill compliance requirements if Commission-issued low-income housing tax credits were used to finance a property.

For more information or questions, property managers and owners should contact their Portfolio Analyst. Subscribe to E-NEWS Email and you will be notified when there are changes to this manual.

Color Cover (PDF)

Color Spine (PDF)

Cover Sheet (PDF) Rev: 08/14/2024

Table of Contents (PDF) Rev 05/01/2020

Chapter & Appendix

Chapter: 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 |
Appendix: A | B | C | D | E | F | G | Q | I | J | K | L | M | N | O | P | Q

Chapter 1

Introduction (PDF) Rev 11/2014
(1.2) Tax Credit Program Overview
(1.3) Compliance Basics
(1.4) Minimum Low-Income Housing Set-Aside
(1.5) Restricted Rents
(1.6) Additional State Rules
(1.6) Compliance Process Overview
(1.6) Tax Credit Only Properties
(1.8) Tax Credit Properties with Tax-Exempt Bonds

Chapter 2

Federal Requirements (PDF) Rev 03/2018
(2.1) Summary
(2.2) For Use by the General Public
(2.3) Fair Housing
(2.3) Violence Against Women Act (VAWA)
(2.4) Suitable For Occupancy
(2.4) Non-Transient Use
(2.4) General Prohibition Against Student Housing
(2.6) Evictions
(2.7) Common Areas
(2.7) Common Area Units
(2.10) Mixed-Income Properties
(2.11) Available Unit Rule
(2.11) Available Unit Rule and Mixed-Income Properties
(2.13) Mixed-Income Buildings with Different Sized Units
(2.14) Available Unit Rule and 100% Affordable Properties
(2.14) Effect of Resident Moving to Another Unit (100% Affordable Properties(
(2.15) Utility Allowances
(2.15) Utility Allowance Documentation
(2.16) Appendix O
(2.16) Utilities Paid by Owner
(2.16) Changes in Allowance
(2.17) Compliance Affordable - Use Periods
(2.18) Resident Certification Package
(2.19) Demographic Data Collection
(2.19) Inspections
(2.20 Correction Period for Non-Compliance
(2.20) Tax Credit/Bond Financed Properties

Chapter 3

Washington State Requirements (PDF) Rev 09/2019
(3.1) Introduction
(3.1) Summary of State Requirements
(3.2) Additional Low-Income Housing Use Period
(3.2) Additional Low-Income Housing Commitments
(3.3) Special-Needs Housing Commitments
(3.3) Newly Placed-in-Service Acquisition/Rehab Properties
(3.3) Large Households
(3.3) Persons with Disabilities
(3.4) Housing for the Homeless
(3.6) Housing for the Elderly
(3.7) Farmworker Housing
(3.7) Double Counting
(3.8) Marketing and Good Faith Efforts (the "30-Day Rule")
(3.9) Restricting Up-Front Charges

Chapter 4

Rents & Tenancy Issues (PDF) Rev 12/2019
(4.1) How to Determine Rent
(4.2) Restricted Rent Requirements
(4.3) What Constitutes Rent
(4.4) Changes in Rent Limits
(4.4) Restricting Up-Front Charges
(4.4) Model Units
(4.4) Household Composition Issues

Chapter 5

Income & Asset Certification (PDF) Rev 03/2018
(5.1) Summary
(5.1) HUD Occupancy Handbook 4350.3, Chapter 5 | See also: Appendix N
(5.1) Income-General Information
(5.2) Verification
(5.3) Determining Annual Wage Income
(5.3) Overtime
(5.3) Year-to-Date Information
(5.4) Include Raises When Calculating Wages
(5.5) Tips
(5.5) Seasonal or Sporadic Wage Income
(5.5) Outside Agency Verifying Income
(5.6) Written Verification
(5.6) Verbal Verification
(5.6) Picture Identification
(5.7) Self-Employed Income Verification
(5.8) On-Site Staff and Management Personnel
(5.8) Non-Wage Income
(5.8) Social Security, Supplemental Security Income (SSI)
(5.9) Alimony and Child Support
(5.10) Foster Child income
(510) Public Assistance/Welfare Income
(5.10) Unemployment, Disability, Worker's Compensation, Severance Pay
(5.11) Military Pay
(5.12) Pensions, Veteran's & other Periodic Benefits
(5.13) Annuities
(5.13) On-Going Monetary Gifts
(5.14) Student Income
(5.15) Additional Income Verification Guidelines
(5.15) Income from Assets
(5.16) Types of Assets
(5.16) Stocks, Bonds, Treasury Bills, Certificates of Deposits, Money Market Funds
(5.17) Trusts
(5.17) Individual Retirement, Keogh, and 401(k) Accounts
(5.18) Rental Income
(5.18) Real Estate Owned
(5.18) Mortgage or Deed of Trust
(5.19) Personal Property Held as an Investment
(5.19) Lump-Sum Receipts
(5.19 Instructions for Valuing Assets
(5.20) Assets Disposed of for Less than Fair Market Value
(5.20) Calculating Income from Assets
(5.21) Types of Excluded and Included Income
(5.21 Additional Income and Asset Information
Other Resources:
Calculating Assets 101- Part 1 & Part 2 Training Videos 05/2008

Chapter 6

Reporting & Records Retention (PDF) Rev 11/2014
(6.1) Summary
(6.1) Owner Annual Certifications
(6.3) Data Collection Requirement
(6.3) Supporting Documentation Forms
(6.7) IRS Forms 8609, Schedule A and 8586
(6.7) Annual Recertifications for 100% Low Income Tax Credit Properties
(6.8) Annual Recertifications for Mixed Income Properties
(6.8) Record Retention

Chapter 7

Noncompliance (PDF) Rev 06/2017
(7.1) Noncompliance with IRS Program Requirements
(7.1) Noncompliance with State Requirements
(7.2) Commencement of Correction Period
(7.2) Common Reasons for Noncompliance
(7.3) Recertifications at 100% Low Income Properties
(7.3) Properties Approved for Post-Year 15 Monitoring Procedures or Recertification Waivers
(7.3) Delays in Making a Unit Suitable for Occupancy
(7.4) Overcharging Rent
(7.5) Residents Found to be Over-income at Time of Move-in
(7.6) Resident Fraud

Chapter 8

Tax-Exempt Bond-Financed Properties with Tax Credits (PDF) Rev 02/2009
(8.1) Summary
(8.1) Income Restrictions

Chapter 9
REMINDER: Property/GP Transfer requests submitted after November 15th will not be completed until after January 1st of the following year.

Property Transfers (PDF) Rev 04/19/2022
(9.1) Summary
(9.2) Maintaining Credit Set-Asides
(9.2) Types of Transfers or Assignments Requiring Commission Consent
(9.2) Transfers to Owners with No Previous Tax Credit Experience
(9.3) Conditions and Consent
(9.3) Fees
(9.4) Timeframe and Completeness
(9.4) How to Submit Required Documents
(9.5) Contact Information
(9.5) Required Document for All Transfers
(9.5) Specific Documentation Required for Sale of Property
(9.8) Specific Documentation Required for Sale of Property (Assumption by Original Nonprofit Sponsor)
(9.8) Specific Documentation Required for Changes to General Partner or Managing Member
(9.9) For Changes to Limited Partner or Upper Tier Member please provide items 2,3,4, and 6 only
Related Forms:
IRS Form SS-4 Application for Employer Identification Number (PDF)
Financial Solvency and LIHTC History (PDF) Rev 02/08/2022
Current Ownership Entity Certification
Proposed Ownership Entity Certification
LIHTC Ownership Capacity Certification Form
LIHTC Management Capacity Certification Form

Chapter 10

Qualified Contract Process (PDF) Rev 02/2009
(10.1) Summary
(10.2) Qualified Contract Packet Materials
(10.2) Fees
(10.3) Additional Owner Requirements
(10.3) Owner Certifications and Commitment
(10.4) Marketing by the Commission
(10.4) Three-Year Period
Attachments
Qualified Contract Notification Letter (PDF)
Calculation of Qualified Contract Price Worksheet (Blank) (Word)
Calculation of Qualified Contract Price Worksheet (Sample) (Word)

Chapter 11

Post-Year 15 Monitoring Procedures (PDF) Rev 03/2017
(11.1) Introduction
(11.2) Qualifying for the Waiver
(11.2) Annual Reports
(11.2) Initial Resident Qualifications
(11.3) Re-Certifications
(11.3) Household Transfers
(11.3) Common Area Units
(11.4) On-Site Visits
(11.4) Compliance Fees
(11.4 Special-Needs Set-Asides
(11.4) Additional Low-Income Set-Asides
(11.4) Record Retention
(11.5) Noncompliance
(11.5) Post-Year 15 Training
(11.5) Fulltime Student Households
(11.5) Utility Allowances
(11.5) Additional Low-Income Housing Use Period
(11.5) Definitions

OTHER RESOURCES:

Post-Year 15 Streamlined Monitoring - Property List (PDF) Rev. 01/2020
Post-Year 15 Streamlined Monitoring Procedures Overview - PowerPoint Slides (PDF) 11/2017
Post-Year 15 Streamlined Monitoring Procedures Overview - Recorded Webinar (MP4 File) 11/2017

Chapter 12

Recertification Waiver Procedure (PDF) Rev 02/2009
(12.1) Introduction
(12.1) Qualifying for the Waiver
(12.2) Request Process
(12.3) Annual Self-Certification Form
(12.3) Annual Reports
(12.3) Household Transfers
(12.4) Assumptions and Reservations
(12.5) Noncompliance
(12.5) Definitions