Basic Tax Credit File Set-Up

Written by Melissa Zera, Compliance Analyst

What makes an auditor happy?  Well organized files!   Some management companies use one file for all program requirements, others maintain separate LIHTC files.  Regardless of which programs your files contain, the key is organization.  We’ve seen all-in-one files with LIHTC, SC8 and HOME that are easy to review due to having a logistical set-up.  The best files have their compliance documents (TICS, verifications, etc.) separated from other documents.   It saves time during an audit not having to shuffle around pet addendums, landlord references and key deposit forms. 

An efficient way to be consistent is to have a file checklist.  Some companies use their checklist as the divider in between the yearly certifications.  For properties that annually recertify households, separating the years with a sheet of colored paper or index divider is another feature auditors like to see. 

Here’s a suggested order for the standard set of LIHTC documents:

  1.  Tenant Income Certification (TIC) – The TIC certifies what was verified and should be the last document signed.
  2. Calculation Worksheet – Show your work!  A piece of paper with how the income is calculated takes the guess work out of where the figures came from on the TIC.  Notated calculator tapes are also nice to see.
  3. Income (or zero Income verifications) – Have all of the income verifications (SS/SSI, Employment, Non-Working Affidavit, Child Support/Alimony, Gift Income, etc. ) together.  Any clarifications should come in front of or directly behind the verifications they support.  This is also a good place to insert the affidavit of estrangement if applicable.
  4. Assets (or zero asset verifications) – Like income, all asset verifications (Bank, 401k, Real Estate, Trust Funds, Under $5,000, etc.) should be together and in order.  When verifying real estate, have the appraisal, mortgage balance and certification together.  
  5. Student verifications – if applicable.
  6. Interview checklist or recertification update forms – if utilized.
  7. Rental Application (move- in certification only) – This document starts the process and is the basis for all the above. 
  8. Lease  (or lease renewal).

 Every site should also have an LIHTC binder containing the following documents:

  1. Signed and executed copies of forms 8609 for each building.
  2. The Land Use Agreement or Regulatory Agreement.
  3. Income limits and utility allowance documentation for each year since the property has been placed in service.
  4. Tenant rent roll with move-in dates.
  5. BINs (Building Identification Numbers) with the correlating units.
  6. Recertification waiver if administered by the State.
  7. Inspection certifications and maintenance records for elevators, sprinklers, generators, and other project systems.

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One Response to “Basic Tax Credit File Set-Up”

  1. Yadira Rodriguez Says:

    Neat!!!!! Thought about the idea of an LIHTC binder however never got to implement it. Was not sure of what should be in it.
    Thank you
    Y.R.

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