LIHTC Property Owners May Provide Temporary Housing


November 8, 2012 – (RealEstateRama) — Due to the massive amount of damage and the number of displaced residents resulting from Hurricane Sandy, especially on the Connecticut shoreline, the IRS has recently published Notice 2012-68, which gives property owners the ability to provide immediate housing to the affected individuals with a temporary lift on the income limit and transient use restrictions.

Normally, property owners must verify all income and assets for each family according to the income limits for the respective city, town, or county. In addition, tenants must sign a lease of no less than 6 months, with the exception of single-room occupancy properties.

At this time, the IRS has waived these two rules in order to accommodate individuals affected by the hurricane. Please see IRS Notice 2012-68 for further details.

The main items covered are:

1. The individual must have lived in an area designated for Individual Assistance by FEMA as a result of Hurricane Sandy. See the FEMA website for disaster declarations:

2. Property owners must obtain written approval from the state housing finance authority (Connecticut Housing Finance Authority {CHFA}) for this relief. CHFA will determine the timeframe, but it will not exceed beyond November 30, 2013. Please address your request to George Rapp, Senior Asset Manager, 999 West Street, Rocky Hill, CT 06067.

3. Owners must notify CHFA that vacant units are available for rent to displaced individuals.

4. Owners must record the following data for their records:
a. Name of displaced person
b. Address of damaged residence
c. Social Security Number
d. Statement signed by the individual, under penalty of perjury, that the displacement was caused by Hurricane Sandy and the individual requires temporary housing.
e. Owner’s certification of the date the displaced individual began temporary occupancy and the date the project will discontinue temporary housing, as established by CHFA.

5. Only the income limit requirement and the transient use restriction are lifted during this time. All other rules, requirements and restrictions still apply, including rent restrictions, student rules, etc.

6. For a new LIHTC project in the first year of the credit period: displaced individuals temporarily residing in such a unit will be deemed a qualified low-income tenant for the purposes of determining the qualified basis and minimum set aside. However, at the end of the temporary period, these individuals will no longer be considered qualified.

7. For vacant* units after the first credit year: the status of a vacant unit that becomes temporarily occupied by a displaced individual remains the same as the unit’s status before the individual moved in. *Such unit could have been considered a previously qualified unit or an empty unit that had previously never been occupied.

Please see the full text of IRS Notice 2012-68, as well as Revenue Procedure 2007-54, before making any decisions about housing temporarily displaced individuals. Both items are attached.

Should you have any questions, please contact George Rapp, Senior Asset Manager, at (860) 571-4265 or via email at .

Previous articleAdmiral Capital Real Estate Fund Makes First Multifamily Investment in Joint Venture with Wood Partners
Next articleRealtors® Think Globally, Act Locally