Send Notices to Remind Households to Report for Recertification

Each year, if you manage a mixed-income site, you have the time-consuming job of recertifying tax credit households. But some households make the process more burdensome for you by failing to show up for a recertification meeting. If household members don’t report to a meeting until shortly before the recertification must be done, you have to scramble to verify income and complete the paperwork. And if household members don’t report at all, you won’t get the information you need to recertify them and you’ll risk noncompliance with tax credit rules.

The best way to avoid a last-minute scramble and get the information you need is to send households a series of reminder notices before the recertification must go into effect. If households don’t report by the dates specified in the first and second notices, send a third, tougher reminder notice 60 days before the deadline. This way you’ll have time to get your work done. And it sets the stage for taking even tougher actions against uncooperative households, such as refusing to renew the lease and seeking their eviction.

We’ll give you three Model Notices: Tell Low-Income Households at Mixed-Income Sites They Must Recertify, which you can send to households to get them to come in for their recertification. And because you’ll start early enough, you’ll have time to follow up and escalate actions with households that don’t take their responsibilities seriously.

Recertification Timetable

Annual certifications ensure affordable housing units are occupied by income-eligible households, and provide a means to ensure compliance with the Next Available Unit Rule and student status. You must establish a recertification anniversary date for each household, and you must notify households of their annual recertification responsibilities.

It’s important to note that the Housing and Economic Recovery Act of 2008 (HERA) eliminated the annual income recertification requirement for projects with 100 percent buildings or buildings with low-income housing tax credit units and no market-rate units.

The IRS considers buildings to be separate projects unless the owner elects to treat certain buildings as a multiple-building project. If you’re unsure how your housing agency allocates tax credits to your site, ask the owner for a copy of the site’s IRS form 8609, Low-Income Housing Credit Allocation Certification. Owners make the election for multiple building projects on Part II, line 8b of IRS form 8609.

If your site contains some 100 percent buildings and some mixed-income buildings, you should obtain copies of the filed 8609s and use caution when determining if 100 percent buildings are exempt from recertification. If the 100 percent buildings are part of a multiple-building project that includes mixed-income buildings, the 100 percent buildings don’t qualify for the exemption. If the 100 percent buildings are treated as a separate project or are part of a multiple-building project that contains only 100 percent LIHTC buildings, then they do qualify for the exemption.

The IRS requires all households at mixed-income sites to recertify annually for income qualification and continued eligibility. You must establish a recertification anniversary date for each household, and you must notify households of their annual recertification responsibilities.

As the date for annual recertification approaches, you need to remind households to report to you to complete the paperwork. Verification documents may not be older than 120 days prior to the certification effective date. If verification has aged past 120 days, new documents must be obtained. HUD’s rules set out what notices you must give, when you must give them, and what those notices must say. For example, you should send reminder notices to the household 120 days, 90 days, and 60 days before the recertification deadline.

And be sure to tell households that all household members age 18 and older must attend a meeting conducted by a staff member. This is because the HUD Handbook requires all adult household members to sign the verification forms [HUD Handbook 4350.3, par. 3-11]. Make copies of any recertification notices that you give the household so you can show that you actually sent them out.

If a household doesn’t report by the date you specify in your notice, send a reminder notice 30 days before the deadline, using stronger language. If the resident doesn’t respond within 30 days of the date of the second reminder notice, HUD says you must send a third reminder notice. HUD Handbook 4350.3 says to send this notice no later than 60 days before the recertification anniversary date. It’s important to take action early. This way, you’ll have time to follow up and, if necessary, get tough with these households.

What Notices Should Say

Our model notices cover the same points. The difference is that subsequent notices take on stronger tones and are more explicit about the consequences of not reporting for recertification. Here’s what our notices cover, and what yours should too.

Set recertification interview date. Tell households to report to the management office for a recertification interview on a specific date and time. Pick a date within 10 days of the date of the letter. Tell households to contact you if they need to reschedule for a different date.

Remind households that federal tax regulations and lease clause require households to recertify. In each letter remind households that recertification is a requirement of the tax credit program. Also point out the specific paragraph in the lease that requires them to attend an interview and cooperate with recertification.

Give deadline for recertification. Give households the recertification deadline. But tell them that they must report for an interview well in advance of the deadline so that you can complete the paperwork. Our notices assume that the recertification deadline is the same as the date the lease expires. In your notices, state whatever date applies at your site.

Spell out penalty for not reporting. Our notices take an increasingly tough approach on what’s at stake if households don’t comply with recertification requirements.

Specify documents and information to bring. You’ll need certain documents and information from households to process their recertifications. Ask households to bring these documents to the recertification interview. You may either incorporate a checklist of specific documents and information requirements in the notices themselves or refer households to a separate checklist that you can attach to the notices.

Say how to reschedule interview. The notices give households the details they need to reschedule the recertification appointment, including the office number and the office hours available to schedule meetings.

If Households Don’t Report

If households fail to comply with recertification after the first three notices, serve them with a notice to vacate 30 days before the recertification date. If this date coincides with the expiration of the lease, state that you’re refusing to renew the lease for failure to recertify. This way you can have them leave before you fall out of compliance.

If there’s still time left on the lease term after the recertification deadline, you should serve the 30-day notice to vacate for material breach of the lease. But if they don’t move out after getting the notice to vacate, you may start an eviction action to avoid putting the unit in noncompliance for the remainder of the lease term.

Contact your attorney and your state housing agency before you serve a notice to vacate, because many states have their own requirements for what the notice must say and when to serve it on the household.