Arkansas Administrative Code › Agency 109 - Arkansas Development Finance Authority › Division 04 - Multi-Family Housing › Rule 109.04.08-003 - Low Income Housing Tax Credit ("LIHTC") and HOME Program Compliance Monitoring Policies and Procedures Manual

Current through Register Vol. 49, No. 6, June, 2024
Introduction
The Arkansas Development Finance Authority (ADFA or the
				Authority), a public body politic and corporate, with corporate succession, was
				created May 1, 1985 by Act 1062. This act abolished the former Arkansas Housing
				Development Agency that had existed since 1977. ADFA was created in part to
				assist low-income and under-served Arkansans in the financing, development and
				preservation of affordable housing. In this quest, ADFA receives and
				administers funds provided by the HOME Investment Partnerships Act (the HOME
				Program) as a Participating Jurisdiction (PJ) through the U. S. Department of
				Housing and Urban Development (HUD).
ADFA is responsible for monitoring the HOME Program. During the
				period of affordability, ADFA's Compliance Monitoring staff will audit files
				and conduct on-site inspections of all completed HOME-funded projects, to-wit:
				rental units, single-family homeowner rehabilitation, acquisition
				rehabilitation, and Tenant-Based Rental Assistance (TBRA).
The purpose of monitoring is to ensure that housing and
				housing-related services are being delivered in accordance with the HOME
				requirements. Specifically, Program rules require that funds be used to provide
				housing and housing-related services for low-and very-low-income residents;
				that any housing produced with HOME funds meet quality standards and is decent,
				safe and sanitary; and that the housing opportunities created with HOME funds
				are available and affordable for specific periods of time. Affordability
				periods can range from five to twenty years, depending on the type of project
				and amount of HOME funds. The HOME Program guidelines appear in 24 CFR Part 92
				of the HOME Investment Partnerships Program Final Rule dated September 16, 1996
				(with May 28, 1997, technical corrections and August 22, 1997, amendments) (the
				Final Rule).
This Monitoring Policies and Procedures Manual is presented to
				provide an overview of procedures as they pertain to the HOME Program. This
				manual is designed to provide guidance to HOME program participants in
				maintaining (1) program and project records; (2) records pertaining to rents,
				income of tenants, and Affirmative Fair Housing guidelines throughout the
				affordability period; and (3) compliance with minimum housing quality standards
				for safe, decent, and sanitary conditions. The guidelines herein are not
				intended to be all-inclusive. In the event of a conflict, the HOME Program
				guidelines will control. Participants and recipients are responsible for
				compliance with amendments and updates to the HOME guidelines.
The participant or recipient is responsible for compliance with
				the requirements of the HOME Program rules. ADFA's obligation to monitor the
				projects for compliance does not make ADFA liable for a participant's or
				recipient's non-compliance.
Non-compliance with HOME Program
				requirements can be costly, as it can lead to the repayment of HOME funds.
				Continued non-compliance may adversely affect an applicant's current and future
				participation in the HOME program. ADFA reserves the right to implement
				additional policies as needed.
Any questions regarding this Manual should be directed
				to:
Compliance Monitoring Department
Arkansas Development Finance Authority
423 Main Street, Suite 500
Little Rock, AR 72201 or
P. O. Box 8023
Little Rock, AR 72203-8023
Telephone: (501) 682-5900
Fax: (501) 682-5859
I.
Scope of the Monitoring Inspection
When a project is selected for review, ADFA staff will contact
				the owner or manager at least two (2) weeks before the scheduled visit. ADFA
				staff will schedule an
initial
review of multi-family
				projects within the first year of project completion, or as soon thereafter as
				possible, to review tenant files; property management and financial viability;
				marketing procedures; tenant selection criteria; rent and occupancy records;
				project financial records (e.g. bank statements, income and expenses, security
				deposit account, reserve account income and expenses). After the initial visit,
				ADFA staff will schedule monitoring reviews as follows:
Multi-family rental projects will be selected based on the
				total number of units in the project:
1 - 4 units every three years
5 -25 units every two years
26 or more units annually
Homeowner rehabilitation and Homebuyer projects will be
				reviewed annually.
Agencies that administer Tenant-Based Rental Assistance (TBRA)
				will be monitored annually during the term of the TBRA assistance.
For projects of up to 5 units, ADFA staff will review all
				tenant files and units. For projects of more than 5 units, ADFA staff will
				randomly select a minimum of five (5) or 20% of tenant files and units for
				monitoring. Staff will focus in the areas of record keeping, fair housing,
				tenant files, housing quality standards (hqs), and other terms or conditions.
				Additionally, owners or recipients must complete and submit the Annual Project
				Compliance Reports for Rental, Homebuyer and Homeowner projects. Samples of the
				Compliance Reports are attached hereto as Exhibits A.
Required Period of
				Affordability
Rehabilitation or acquisition of existing structures
						  with HOME investment per unit of:
Period of Affordability
Less than $15,000
5 years
$15,000 - $40,000
10 years
$40,000 or more
15 years
Refinance of Rehabilitation project:
Any Amount
15 years
New construction, including acquisition of new
						  units:
Any amount
20 years
II.
Program Records
We recommend that each project owner or manager prepare a
				binder titled "ADFA HOME Compliance" for each project. Since the information in
				the binder will be reviewed by ADFA staff
during each
				visit
, the binder must contain copies of the following:
1. HOME Application for funding (current on
			 top);
2. HOME Agreements (current
			 on top);
3. Previous monitoring
			 reviews, audits, and correspondence by ADFA, Rural Development, HUD,
			 etc);
4. Evidence of compliance
			 with Section 3 Policy (ensure that employment and other economic opportunities
			 generated by Federal financial assistance for housing and community development
			 programs be directed, to the greatest extent feasible, toward low- and very-low
			 income persons, particularly those who are recipients of government assistance
			 for housing);
5. Current
			 Affirmative Fair Housing Marketing Plan;
6. Racial Data on head of household for
			 statistical purposes only and to verify program beneficiaries;
7. Completed ADFA Fair Housing Data
			 Sheet;
8. HOME Rents and HOME
			 Income Limits (current on top); these are available on the HUD or ADFA web
			 sites;
9. Utility Allowances
			 (current on top);
10.
			 Leases;
11. Tenant Selection
			 Criteria;
12. Total number and
			 location of HOME units in the property, and identified as "floating" or
			 fixed";
13. Rents charged on each
			 unit,
14. Change in ownership
			 documentation, if applicable;
15.
			 CHDO Approval Certification from ADFA, if applicable (current on top);
			 and
16. Evidence of paid real
			 estate taxes and homeowners insurance, as applicable for homebuyer/homeowner
			 program.