Did Site Owner Make Additional Promises to Agency in Return for Credits?

Maintaining the minimum set-aside and applicable fraction are a tax credit site manager’s two most important occupancy goals during the compliance period. But you must also be sure to find out whether the site owner made any extra promises to your state housing agency in return for its tax credit allocation.

For instance, if the owner agreed to meet an additional set-aside for a special population group—such as for elderly, homeless, or disabled residents—you’ll need to maintain that set-aside after you take over management of the site. Or if the owner agreed to set aside specific units for special groups, you’ll need to continue to set aside those units.

Any additional promises should appear either in the owner’s application for tax credits or in the extended use agreement it signed with your state housing agency. So compare the answers you get from the owner or former manager with the information in these documents. And if the owner agreed to set aside specific units for special population groups, ask the owner for a development map that shows where each special unit has been assigned.

For more questions to ask when you’re new to a site, see “Ask Nine Questions When Taking Over Tax Credit Site Management,” available to subscribers here.