Tip #3: Know the definition of "project" in the LIHTC program.
The IRS considers each building in an LIHTC development its own project unless the owner indicates that the building is part of a multi-building project. This important election is made by the owner on line 8b of the IRS Form 8609.
If the project consists of multiple buildings, then "yes" will be checked on line 8b of the IRS Form 8609. If "yes" is selected, the owner must attach a statement to the form identifying each building in the multi-building project by Building Identification Number (BIN). If "no" is selected, then each building is its own project.
This election by the owner affects the project's minimum set-aside and the ability of tenants to move between buildings without re-qualifying for initial LIHTC eligibility.
Bottom line: Know what your IRS Forms 8609 say!
To review, the three tips I've discussed are:
- Understand what your state monitoring agency’s compliance manual says.
- Know what funding/subsidy sources your development has.
- Know the definition of “project” in the LIHTC program.
Managing the LIHTC program is a complex task. Be sure your agency has a clear plan for success.
As professional development manager, Sheryl Putnam took the lead role in designing NMA's newest certification seminar, Fundamentals of Low-Income Housing Tax Credit (LIHTC) Management. Prior to joining Nan McKay and Associates in 2011, Ms. Putnam managed the compliance department for a state housing finance agency, providing compliance oversight activities for the LIHTC, PBRA, and HOME programs. She also wrote a series for the NMA blog about blended occupancy projects.
