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USDA RD ESSENTIALS of OCCUPANCY Karen Crosta KDC Solutions, LLC. - ppt download
USDA RD ESSENTIALS of OCCUPANCY Karen Crosta KDC Solutions, LLC.
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1 USDA RD ESSENTIALS of OCCUPANCY Karen Crosta KDC Solutions, LLC
2 Part 1Introduction to RD MFH & Eligibility Part 2Applications & Waiting List Maintenance Part 3Tenant Selection & Unit Assignment Part 4Basics of Certifications 2
3 PART 1 INTRODUCTION TO RD MFH PROGRAMS &ELIGIBILITY 3
4 INTRODUCTION to RD MFH Finances the property Reduces the effective interest rate Provides Rental Assistance Monitors its investment 4
5 RD MFH PROGRAMS Section 515 o Direct Loan Program o Interest Credits reduce effective interest rate of loan to 1% - 3% Note Rate Rent vs. Basic Rent o Must lease to income-eligible HH 5
6 RD MFH PROGRAMS Section 514 Loans & Section 516 Grants for Off-Farm Labor Housing (LH) o Direct loans or grants to house farm laborers o Same general terms as Section 515 o Must lease to income-eligible HH Section 514 Loans for On-farm Housing 6
7 In exchange for favorable financing and rental subsidies, owners agree to comply with all of RD’s rules and regulations regarding all aspects of managing and maintaining the property. 7
8 RESOURCES HB-2-3560 o MFH Asset Management Handbook HUD 4350.3 o Occupancy Requirements of Subsidized Multifamily Housing Programs Chapter 5 Appendix 3 Management Plan 8
9 ELIGIBILITY 9
10 Name the 4 criteria that an applicant must meet in order to be determined eligible for occupancy at an RD MFH property. 10
11 ELIGIBILITY for OCCUPANCY 1.Must be income eligible for project or be eligible under another source (i.e. HUD, LIHTC); and 2.Must meet program definition of an eligible household; and 3.Must meet owner’s occupancy policies; and 4.Must meet owners’ screening criteria 11
12 Name the 3 additional criteria an applicant must meet in order to be eligible for an off- farm labor housing property 12
13 ELIGIBILITY for OCCUPANCY 5.Must be a US Citizen or legal alien/resident of US, Puerto Rico or the Virgin Islands 6.Tenant/Co-tenant must be a domestic farm laborer o Or a retired or disabled domestic farm laborer (or surviving household of deceased domestic farm laborer) 7.Must receive a substantial portion of income from farm labor employment o Income from farm labor must be at least 65% of the Federal Regional Income Limits for Hired Farmworkers (Attachment 6-H) 13
14 1. Must be Income Eligible Use RD published Income Limits (2/12/14) Based on locale and household size The HH adjusted annual income cannot exceed the applicable income limit Three income levels: o Moderate = 95% of Median Income o Low = 80% of Median Income o Very Low = 50% of Median Income 14
15 Whose Income Counts When Applying Income Limits? All persons intending to reside in unit, including foster children/adults Children temporarily absent due to placement in a foster home Children in joint custody arrangement (50%) Children away at school but home for recesses Unborn children Children in process of being adopted Temporarily absent family members Family member in hospital/rehab for limited/fixed time Persons permanently confined to hospital/nursing home Exclude: Live-in Aides & Chore Service Workers 15
16 2.Must meet program definition of an eligible household Family Housing Units o May include elderly & non-elderly HH o Cannot market or prioritize to one group or the other Elderly Housing Units o Tenant/co-tenant must be 62 or older, or have a disability o Cannot exclude children of eligible elderly HH o Cannot be exclusively for disabled HH 16
17 3.Must meet Owner’s Occupancy Policies RD does not specify Must be RD approved Allow HH to choose unit size/style/location within your occupancy policies Address reasonable accommodations Include both HH members and eligible non-members 17
18 4.Must meet Owner’s Screening Criteria Found in Management Plan Must be applied uniformly 18
19 SPECIAL CONSIDERATIONS 19
20 ELIGIBILITY of STUDENT as TENANT/CO-TENANT ALL of the following must apply: Must be otherwise eligible; and Must be of legal age or otherwise legally able to enter into a contract per State law; and Must have established a HH separate & distinct from parents/legal guardians; and Must no longer be claimed as a dependent by parents/legal guardians per IRS; and Must sign a written statement indicating if parents/legal guardians provide any financial assistance 20
21 INELIGIBILITY An applicant is ineligible to move in if they fail to meet any of the eligibility criteria A tenant is considered ineligible when, at recertification, they fail to meet either the income or the occupancy requirements for the unit or property. If ineligible and required to vacate, must vacate within 30 days or at end of lease term, whichever is longer. 21
22 CONTINUED OCCUPANCY of INELIGIBLE TENANTS Occupancy Ineligible (Over/Under Housed) Must transfer to appropriate unit size within 30 days of availability If no appropriate unit size exists in project, must vacate Exception: May continue occupancy if no 1-bdrm. in project and it is in owner’s written policies. Income Ineligible Must vacate 22
23 REMAINING HH MEMBER May continue occupancy regardless of age, if: o Income eligible; and o Was a HH member & has legal ability to sign lease; and o Occupied unit with original tenant at time of death/departure; and o Signs own certification & establishes own tenancy o If over-housed, must transfer to appropriate unit size within 30 days of availability If no appropriate unit size exists, must vacate 23
24 SURVIVING HH MEMBER For elderly HH in elderly project only! May continue occupancy, regardless of age, if: o Same criteria as “remaining HH member”; BUT o May remain in unit Should transfer to appropriate unit size May remain in unit if over-housed but appropriate unit size does not exist If unit has accessibility features no longer needed, must transfer to non-accessible unit within 30 days of applicant/tenant applying for accessible unit. 24
25 PART 2 APPLICATIONS& WAITING LIST MAINTENANCE 25
26 26 1.Are applicants properly informed of where and when applications may be obtained and submitted? 2.Does the application provide adequate information to determine the applicant’s place on the waiting list? 3.Are applications processed in a timely manner? 4.Are ineligible applicants adequately notified of their appeal rights? 5.Is adequate documentation available to determine compliance with applicant processing requirements?
27 1.Are applicants properly informed of where and when applications may be obtained and submitted? Must establish place and time for accepting applications Should be posted in central location at property Must be addressed in the Management Plan Must be addressed in the AFHMP Should be communicated in marketing 27
28 2.Does the application provide adequate information to determine the applicant’s place on the waiting list? Names of all HH members, birthdates & current address HH Income, Asset & Adjustment data Consent to Release Wage Matching Consent to Verify Employment Indication of need for accessible unit and/or Disability Assistance adjustment to income Certification the unit will be primary residence SSN for all HH members age 6 and older Citizenship/Eligible Immigration certification – LH only Signature and date Race, Ethnicity & Gender disclosure (below signature line) Fair Housing statement (UL 11/9/12) Fair Housing & Accessibility logotypes 28
29 APPLICATION Must o Provide written list of all information needed to be considered complete o Advise priority cannot be established until all information is received Verification not necessary to be considered complete 29
30 APPLICATIONS FAIR HOUSING RESTRICTIONS It is unlawful to inquire of the presence or severity of a disability, EXCEPT to: 30
31 APPLICATIONS FAIR HOUSING RESTRICTIONS Determine eligibility for o Designated units or programs o Adjustment to income for elderly/disabled status o Priority for specific units Determine if applicant is a current user of illegal substances, has prior conviction for use, manufacture, or distribution of illegal substances, or has successfully completed or is currently enrolled in a substance abuse recovery program. 31
32 APPLICATIONS FAIR HOUSING RESTRICTIONS Disability related questions must be asked of ALL applicants May verify disability only AFTER applicant/tenant requests a disability be considered 32
33 3.Are applications processed in a timely manner? 10 DAYS Provide written notification to applicant of disposition of application 33
34 APPLICATION DISPOSITION Incomplete Offer a unit Placed on waiting list Rejected 34
35 4.Are ineligible applicants adequately notified of their appeal rights? Notify in writing Outline reason for rejection Include FCRA Summary of Rights Include Grievance and Appeal Rights & Procedures o 5 days informal meeting o 10 days to request a hearing Deliver certified-return receipt or hand deliver with signed acknowledgement of receipt 35
36 5.Is adequate documentation available to determine compliance with applicant processing requirements? Application cover letter Application – Date/Time Stamped Race/Ethnicity Data form Authorization to Verify Employment – all adults Consent to Release Wage Matching – all adults Citizenship/Eligible Immigration Status – LH only Application Status/Acceptance notifications 36
37 APPLICATION DOCUMENTATION Paper o Date/time stamped upon receipt o Keep copies of notifications to applicant Verbal o Document and keep with application Record on Waiting List o Ensure dates/times recorded match with the paper copy date/time stamp 37
38 APPLICATION RETENTION Inactive (withdrawn from wait list) o The longer of 3 years or to next supervisory review Active o Until withdrawn + the longer of 3 years or next supervisory visit; or o If become tenant, retain in tenant file 38
39 WAITING LIST MAINTENANCE All applications must be placed on the waiting list o Regardless of disposition, complete/incomplete or eligible/ineligible Document date/time when completed application received Document any activity and changes to application with date/time/explanation Document final disposition of application 39
40 WAITING LIST MAINTENANCE Date/time when completed application received Name Race/Ethnicity (Tenant) Unit size(s) Income level (V, L, M) RA Eligibility Need for accessible unit Farm laborer status (LH only) o Active, Disabled/Retired local, Disabled/Retired non- local ) LOPE or FEMA Room for notations 40
41 PART 3 TENANT SELECTION & UNIT ASSIGNMENT 41
42 TENANT SELECTION 1 st Unit Size 2 nd Income Level 1 st = VL 2 nd = L 3 rd = M 3 rd Category/Priority Level (Accessible unit, LOPE) First Come-First Served basis by date/time completed application was received within a category or priority (NA Labor Housing) 42
43 WAITING LIST PRIORITIES Rank by VL, L then M within each category Vacant non-accessible units 1 st to in-place tenant who is over/under-housed Vacant accessible units o 1 st to in-place tenant needing features o 2 nd to applicant needing features from any income, with priority to VL, then L, then M o May offer unit larger than required 43
44 WAITING LIST PRIORITIES Rank by VL, L then M within each category LOPE & FEMA have priority over any other applicants within their income group, regardless of unit size needed o May offer unit larger than required LIHTC may leave unit vacant for LIHTC eligible applicant HUD Section 8 may use HUD’s priorities 44
45 SELECTING WHEN RA AVAILABLE VL has priority in any list or category Low is OK if no RA-eligible tenant in occupancy and no VL applicant on wait list Moderate-income are never RA eligible 45
46 TENANT SELECTION IN LH (with or without RA) Off-Farm Categories 1 st Active Farm Laborer HH 2 nd Disabled/Retired domestic farm laborer who was active in local area at time of disability/ retirement 3 rd Other Disabled/Retired farm laborer who was not active in the local area at time of disability/retirement 46
47 TENANT SELECTION IN LH Within each category: VL, then L, then M Exhaust one category before going to the next Disabled has priority over Retired in any given category 47
48 PART 4 BASICS OF CERTIFICATIONS 48
49 BASICS Certifications are a requirement of eligibility for occupancy and for benefits A certification must be executed prior to occupancy and annually thereafter Borrowers must verify and document all income, assets, expenses, deductions, family characteristics and any other factors that affect eligibility or level of assistance. 49
50 BASICS Form RD 3560-8, Tenant Certification, is the means by which these verified factors are documented A certification must be signed by both tenant and borrower on/before its effective date o Tenant signature certifies to accuracy of information provided (names, birthdates, income, assets, etc) o Borrower certifies that all the information recorded on RD form 3560-8 has been verified Certifications are effective for 12 months 50
51 Name the three types of certifications. Initial Certification Annual Recertification Interim Recertification 51
52 TYPES OF CERTIFICATIONS Initial Certification o Completed prior to moving into property o Must verify all factors affecting eligibility & level of assistance o Effective for 12 months 52
53 TYPES OF CERTIFICATIONS Annual Recertification o Completed annually o Must verify all factors except those not subject to change (i.e., name, birthdate, SS#) o Effective for 12 months 53
54 TYPES OF CERTIFICATIONS Interim Recertification o Completed prior to expiration of existing certification o Must verify all factors except those not subject to change o Creates a new 12 month certification period and changes Annual Recertification date 54
55 EFFECTIVE DATES Initial Certifications (Move-Ins) o 1 st day of month following initial entry to property o If MI is on the 1 st, effective date is same as move-in If MI is June 7, what is the effective date of the certification? July 1 55
56 EFFECTIVE DATES Annual Recertification o Certification expires on the last day of the 12 month period o AR effective date is the 1 st day of month following expiration If the current certification was effective August 1, 2013 what will be the effective date of the next Annual Recertification? August 1, 2014 56
57 EFFECTIVE DATES Interim Recertification o Effective on 1 st day of month following receipt of verifications o Must complete within 30 days of tenant notification of change If tenant reports a change on May 9, and verifications are received June 3, what will be the effective date of the Interim Recert? July 1 57
58 SUBMISSION TIME FRAMES Due on 10 th of month following effective date If late, overage is charged Tenant at fault = Must attempt to recapture the monies Borrower at fault = Overage must be paid from non-project funds 58
59 ANNUALRECERTIFICATIONS 59
60 TENANT RESPONSIBILITIES Provide income, asset & household information Authorize borrower to verify information If tenant fails to perform responsibilities o Charge Note Rate rent o Commence Termination of Tenancy 60
61 BORROWER RESPONSIBILITIES Maintain tracking & monitoring system to ensure timely initiation and completion of certifications Obtain verification of all factors Send appropriate notices to tenant Notify tenant of new rent in a timely manner Submit certifications to RD within 10 days of effective date Retain for 3 years or to next supervisory visit, whichever is greater 61
62 AR NOTICES Initial Notice o Send 75-90 days preceding expiration of current certification o Hand-delivery or 1 st class mail o Retain copy in tenant file with date mailed or delivered 62
63 AR NOTICES Final Notice o Send 30 days preceding expiration of current certification o Advise of consequences for failure to comply Retain copy of notice in tenant file with date mailed or delivered Recommend send 30-day notice of rent increase under separate cover 63
64 FAILURE TO RECERTIFY TENANT AT FAULT Within 10 days of certification expiration, send to Tenant and RD written notification that: o Termination proceedings are being initiated; and o Tenant to be charged Note Rate rent until lease is terminated Must have documentation that recertification notices were sent timely (send copies to RD) 64
65 INTERIMRECERTIFICATIONS 65
66 TRUE or FALSE? A tenant must report to you if their income increases by $40 month. TRUE 66
67 TRUE or FALSE? You must perform an Interim Recertification if you learn a tenant cashed in their Treasury Bill worth $4,500. FALSE 67
68 YES or NO? Your tenant tells you his brother moved into his apartment two months ago. This is news to you. Should you perform an Interim Recertification to include the brother as a household member at the time you learn of this? NO 68
69 TENANT RESPONSIBILITIES Report any changes in household status that could affect eligibility or level of assistance o Income increases or decreases o Changes in household size o Changes to household adjustments (i.e., child care, medical, disability assistance, etc.) o Change in household or member status (member turns 18 or 62, or member becomes disabled, etc.) 69
70 BORROWER RESPONSIBILITIES Recertify immediately only if tenant reports: o Income change of $100/month or more (increase or decrease) o At tenant request for changes of $50/month or more (increase or decrease) Complete the recertification within 30 days of notification by tenant Submit to RD within 10 days of effective date 70
71 PENALTIES FOR FAILURE TO REPORT Cannot charge Note Rate rent Cannot terminate tenancy Recertify retroactively as if tenant had reported timely Report failure to RD Make every effort to recapture unauthorized assistance from tenant 71
72 A FEW TIPS 72
73 Maintain a tracking system o Use Certification/Recertification Checklists (CARH Model Documents) Use a working file until certification is complete (including signatures) o Do not place into Tenant File until complete On Recertification Notices to tenant, provide: o A date and time for recert interview o A list of all potential documents tenant should bring o Advise signatures are required to render a certification complete Make copies of recert notices and date stamp them with date mailed/delivered 73
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