2015 spectrum lihtc training maximizing tax credit delivery on acquisition/rehabs presented by erik...
TRANSCRIPT
![Page 1: 2015 SPECTRUM LIHTC TRAINING Maximizing Tax Credit Delivery on Acquisition/Rehabs Presented by Erik Whitton May 20, 2015 10:15am – 11:45am](https://reader031.vdocuments.site/reader031/viewer/2022032723/56649f575503460f94c7b4a6/html5/thumbnails/1.jpg)
2015 SPECTRUM LIHTC TRAINING
Maximizing Tax Credit Delivery on Acquisition/Rehabs
Presented by Erik Whitton
May 20, 2015
10:15am – 11:45am
![Page 2: 2015 SPECTRUM LIHTC TRAINING Maximizing Tax Credit Delivery on Acquisition/Rehabs Presented by Erik Whitton May 20, 2015 10:15am – 11:45am](https://reader031.vdocuments.site/reader031/viewer/2022032723/56649f575503460f94c7b4a6/html5/thumbnails/2.jpg)
CONTACT INFOErik Whitton
207-767-8000 x210
www.spectrumlihtc.com
Download full article with reference links on CAHEC site or Spectrum Blog
![Page 3: 2015 SPECTRUM LIHTC TRAINING Maximizing Tax Credit Delivery on Acquisition/Rehabs Presented by Erik Whitton May 20, 2015 10:15am – 11:45am](https://reader031.vdocuments.site/reader031/viewer/2022032723/56649f575503460f94c7b4a6/html5/thumbnails/3.jpg)
ACQUISITION REHAB
• Introduce Spectrum Article
• Failure to maximize credits = result of poor communication
• May not be IRS noncompliance
• But will be costly to the property
![Page 4: 2015 SPECTRUM LIHTC TRAINING Maximizing Tax Credit Delivery on Acquisition/Rehabs Presented by Erik Whitton May 20, 2015 10:15am – 11:45am](https://reader031.vdocuments.site/reader031/viewer/2022032723/56649f575503460f94c7b4a6/html5/thumbnails/4.jpg)
ACQUISITION REHAB
• Key Issue: clear communication in early stages
• All parties must be involved
• HFA; Investor; Property Ownership; Property Manager
• Note the following items (at minimum):
![Page 5: 2015 SPECTRUM LIHTC TRAINING Maximizing Tax Credit Delivery on Acquisition/Rehabs Presented by Erik Whitton May 20, 2015 10:15am – 11:45am](https://reader031.vdocuments.site/reader031/viewer/2022032723/56649f575503460f94c7b4a6/html5/thumbnails/5.jpg)
ACQUISITION REHAB
• Date of Acquisition
• Timing of Construction
• Will tenants relocate?
• What is 1st Credit Year?
• What is Minimum Set Aside?
![Page 6: 2015 SPECTRUM LIHTC TRAINING Maximizing Tax Credit Delivery on Acquisition/Rehabs Presented by Erik Whitton May 20, 2015 10:15am – 11:45am](https://reader031.vdocuments.site/reader031/viewer/2022032723/56649f575503460f94c7b4a6/html5/thumbnails/6.jpg)
ACQUISITION REHAB
• How Many LIHTC Units; How many MKT?
• What Credit Delivery Promised to Investor?
• How is “Project” Defined (Multiple BINS Only)
• What Existing Tenants Won’t Qualify?
![Page 7: 2015 SPECTRUM LIHTC TRAINING Maximizing Tax Credit Delivery on Acquisition/Rehabs Presented by Erik Whitton May 20, 2015 10:15am – 11:45am](https://reader031.vdocuments.site/reader031/viewer/2022032723/56649f575503460f94c7b4a6/html5/thumbnails/7.jpg)
TENANT CERTIFICATION
• In Place Tenants:
• TIC Eff Date = Date of Acquisition
• Manager has 120 days to Complete
• If no Mgt Change – you have 120 days before *and* after DOA
• Do not back date paperwork or signatures
![Page 8: 2015 SPECTRUM LIHTC TRAINING Maximizing Tax Credit Delivery on Acquisition/Rehabs Presented by Erik Whitton May 20, 2015 10:15am – 11:45am](https://reader031.vdocuments.site/reader031/viewer/2022032723/56649f575503460f94c7b4a6/html5/thumbnails/8.jpg)
TENANT CERTIFICATION
• Anyone certified within 120 days gets IRS Safe Harbor treatment
• And, owner can claim credits as of DOA if rehab is done in the same year
![Page 9: 2015 SPECTRUM LIHTC TRAINING Maximizing Tax Credit Delivery on Acquisition/Rehabs Presented by Erik Whitton May 20, 2015 10:15am – 11:45am](https://reader031.vdocuments.site/reader031/viewer/2022032723/56649f575503460f94c7b4a6/html5/thumbnails/9.jpg)
TERMINATING TENANCY
• Some HH’s may not qualify
• Owner must have Good Cause to Evict or Not Renew
• Over-income is not good cause
• Notify tenants in writing of their right to remain in the unit
• Try to work out an incentive to vacate
• Must be voluntary
![Page 10: 2015 SPECTRUM LIHTC TRAINING Maximizing Tax Credit Delivery on Acquisition/Rehabs Presented by Erik Whitton May 20, 2015 10:15am – 11:45am](https://reader031.vdocuments.site/reader031/viewer/2022032723/56649f575503460f94c7b4a6/html5/thumbnails/10.jpg)
RESYNDICATION
• Income and Rent Limits May Decrease
• No Longer HERA or Hold Harmless
• Existing Tenants May Pay Less Rent
![Page 11: 2015 SPECTRUM LIHTC TRAINING Maximizing Tax Credit Delivery on Acquisition/Rehabs Presented by Erik Whitton May 20, 2015 10:15am – 11:45am](https://reader031.vdocuments.site/reader031/viewer/2022032723/56649f575503460f94c7b4a6/html5/thumbnails/11.jpg)
RESYNDICATION
• Existing Tenant Might Be Over Income
• “Grandfathered”
• Income Only!
• Rent Must Remain Restricted
• Cannot be Ineligible FT Students
• Original Move In File Must be Good!
![Page 12: 2015 SPECTRUM LIHTC TRAINING Maximizing Tax Credit Delivery on Acquisition/Rehabs Presented by Erik Whitton May 20, 2015 10:15am – 11:45am](https://reader031.vdocuments.site/reader031/viewer/2022032723/56649f575503460f94c7b4a6/html5/thumbnails/12.jpg)
Good Bye! Thank You! Have Fun!