Don't Perform Full Recertifications When They’re Not Necessary

The Housing and Economic Recovery Act of 2008 (HERA) eliminated the annual income recertification requirement for 100 percent buildings. Each state agency, however, may opt to tighten the rule and impose its own recertification requirements. In addition, some owners may still complete annual recertifications to meet compliance requirements for other funding sources such as bonds or HOME funds.

But even with the changes imposed by HERA, there’s still a significant number of owners and managers who are performing full annual recertifications at their 100 percent low-income sites when full recertifications aren’t required. According to tax credit expert Karen Graham, force of habit and desire for consistency are the most likely culprits preventing a reluctant compliance professional from implementing a shortened recertification process.

According to Graham, depending on the state, a shortened recertification process may include a brief form asking for household composition information, student status, and a demonstration that the rent is under maximum thresholds. More important, the shortened recertification process doesn’t require third-party verifications on income, which can take the most time.

Some owners and managers also may be resistant to implementing this change due to concerns of not catching resident fraud at recertifications. If this is the concern, Graham recommends doing a full first-year recertification with third-party verifications to catch any fraud at move-in and then implementing the shortened process for subsequent years. Eventually, adopting this reduction in paperwork that the law allows will save you time and effort and go a long way toward increasing efficiency at your office.

Insider Source

Karen Graham, CPM(R), HCCP, SHCM: President, Karen A. Graham Consulting, LLC; www.compliancesupport.com.