Citizenship Requirements and the LIHTC Program

Q My company has just started managing our first tax credit site. Some of our applicants aren’t U.S. citizens. We’ve previously managed Section 8 sites and have had to reject applicants because they were noncitizens without proper documentation. Is there any citizenship requirement for tax credit sites?

A No. The tax credit law has no provision requiring residents to be citizens or properly documented noncitizens. HUD programs, however, require documentation of citizenship for subsidy. This procedure must be completed for all applicants who are noncitizens. The federal law that places restrictions on noncitizens at HUD-assisted sites doesn’t cover tax credit sites. So unless your tax credit site also gets assistance through a HUD program, that law’s requirements don’t apply.

Though a citizenship restriction isn’t legally required for LIHTC sites, it may be the case that the owner or housing finance agency has established some noncitizen restrictions. An owner may have elected to establish such a criterion as part of its resident selection plan. But any such criterion must be applied uniformly. Thus, if an owner or manager elects to require that all residents be legal residents of the United States, all applicants for housing must be asked to provide proof of resident status.

With regard to citizenship status, the Guide for Completing Form 8823: Low-Income Housing Credit Agencies Report of Noncompliance or Building Disposition states the Fair Housing Act (FHA) doesn’t prohibit discrimination based solely on a person’s citizenship status. Therefore, asking housing applicants to provide documentation of their citizenship or immigration status during the screening process wouldn’t violate the FHA. But the guide emphasizes that owners implementing citizenship or immigration status screening measures must make sure they are carried out in a uniform, nondiscriminatory fashion.