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USDA RD ESSENTIALS of OCCUPANCY. Karen Crosta KDC Solutions, LLC. Part 1 Introduction to RD MFH & Eligibility Part 2 Applications & Waiting List Maintenance Part 3 Tenant Selection & Unit Assignment Part 4 Basics of Certifications. PART 1

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Usda rd essentials of occupancy

USDA RDESSENTIALS ofOCCUPANCY

Karen Crosta

KDC Solutions, LLC


Part 1 Introduction to RD MFH & Eligibility

Part 2 Applications & Waiting List Maintenance

Part 3 Tenant Selection & Unit Assignment

Part 4 Basics of Certifications


PART 1

INTRODUCTION TO RD

MFH PROGRAMS

&

ELIGIBILITY


Introduction to rd mfh
INTRODUCTION to RD MFH

  • Finances the property

  • Reduces the effective interest rate

  • Provides Rental Assistance

  • Monitors its investment


Rd mfh programs
RD MFH PROGRAMS

  • Section 515

    • Direct Loan Program

    • Interest Credits reduce effective interest rate of loan to 1% - 3%

      • Note Rate Rent vs. Basic Rent

    • Must lease to income-eligible HH


Rd mfh programs1
RD MFH PROGRAMS

  • Section 514 Loans & Section 516 Grants for Off-Farm Labor Housing (LH)

    • Direct loans or grants to house farm laborers

    • Same general terms as Section 515

    • Must lease to income-eligible HH

  • Section 514 Loans for On-farm Housing


In exchange for favorable financing and rental subsidies, owners agree to comply with all of RD’s rules and regulations regarding all aspects of managing and maintaining the property.


Resources
RESOURCES owners agree to comply with all of RD’s rules and regulations regarding all aspects of managing and maintaining the property.

  • HB-2-3560

    • MFH Asset Management Handbook

  • HUD 4350.3

    • Occupancy Requirements of Subsidized Multifamily Housing Programs

      • Chapter 5

      • Appendix 3

  • Management Plan


ELIGIBILITY owners agree to comply with all of RD’s rules and regulations regarding all aspects of managing and maintaining the property.


Name the 4 criteria that an applicant must meet in order to be determined eligible for occupancy at an RD MFH property.


Eligibility for occupancy
ELIGIBILITY for OCCUPANCY be determined eligible for occupancy at an RD MFH property.

  • Must be income eligible for project or be eligible under another source (i.e. HUD, LIHTC); and

  • Must meet program definition of an eligible household; and

  • Must meet owner’s occupancy policies; and

  • Must meet owners’ screening criteria


Name the 3 additional criteria an applicant must meet in order to be eligible for an off-farm labor housing property


Eligibility for occupan cy
ELIGIBILITY for OCCUPAN order to be eligible for an off-farm labor housing propertyCY

  • Must be a US Citizen or legal alien/resident of US, Puerto Rico or the Virgin Islands

  • Tenant/Co-tenant must be a domestic farm laborer

    • Or a retired or disabled domestic farm laborer (or surviving household of deceased domestic farm laborer)

  • Must receive a substantial portion of income from farm labor employment

    • Income from farm labor must be at least 65% of the Federal Regional Income Limits for Hired Farmworkers (Attachment 6-H)


1 must be income eligible
1. Must be Income Eligible order to be eligible for an off-farm labor housing property

  • Use RD published Income Limits (2/12/14)

  • Based on locale and household size

  • The HH adjusted annual income cannot exceed the applicable income limit

  • Three income levels:

    • Moderate = 95% of Median Income

    • Low = 80% of Median Income

    • Very Low = 50% of Median Income


Whose income counts when applying income limits
Whose Income Counts When order to be eligible for an off-farm labor housing propertyApplying Income Limits?

  • All persons intending to reside in unit, including foster children/adults

  • Children temporarily absent due to placement in a foster home

  • Children in joint custody arrangement (50%)

  • Children away at school but home for recesses

  • Unborn children

  • Children in process of being adopted

  • Temporarily absent family members

  • Family member in hospital/rehab for limited/fixed time

  • Persons permanently confined to hospital/nursing home

    Exclude: Live-in Aides & Chore Service Workers


Must meet program definition of an eligible household
Must meet program definition of an eligible household

  • Family Housing Units

    • May include elderly & non-elderly HH

    • Cannot market or prioritize to one group or the other

  • Elderly Housing Units

    • Tenant/co-tenant must be 62 or older, or have a disability

    • Cannot exclude children of eligible elderly HH

    • Cannot be exclusively for disabled HH


Must meet owner s occupancy policies
Must meet Owner’s Occupancy Policies household

  • RD does not specify

  • Must be RD approved

  • Allow HH to choose unit size/style/location within your occupancy policies

  • Address reasonable accommodations

  • Include both HH members and eligible non-members


Must meet owner s screening criteria
Must meet Owner’s Screening Criteria household

  • Found in Management Plan

  • Must be applied uniformly



Eligibility of student as tenant co tenant
ELIGIBILITY of STUDENT householdas TENANT/CO-TENANT

ALL of the following must apply:

  • Must be otherwise eligible; and

  • Must be of legal age or otherwise legally able to enter into a contract per State law; and

  • Must have established a HH separate & distinct from parents/legal guardians; and

  • Must no longer be claimed as a dependent by parents/legal guardians per IRS; and

  • Must sign a written statement indicating if parents/legal guardians provide any financial assistance


Ineligibility
INELIGIBILITY household

  • An applicant is ineligible to move in if they fail to meet any of the eligibility criteria

  • A tenant is considered ineligible when, at recertification, they fail to meet either the income or the occupancy requirements for the unit or property.

  • If ineligible and required to vacate, must vacate within 30 days or at end of lease term, whichever is longer.


Continued occupancy of ineligible tenants
CONTINUED OCCUPANCY of INELIGIBLE TENANTS

  • Occupancy Ineligible (Over/Under Housed)

    • Must transfer to appropriate unit size within 30 days of availability

    • If no appropriate unit size exists in project, must vacate

    • Exception: May continue occupancy if no 1-bdrm. in project and it is in owner’s written policies.

  • Income Ineligible

    • Must vacate


Remaining hh member
REMAINING HH MEMBER TENANTS

  • May continue occupancy regardless ofage, if:

    • Income eligible; and

    • Was a HH member & has legal ability to sign lease; and

    • Occupied unit with original tenant at time of death/departure; and

    • Signs own certification & establishes own tenancy

    • If over-housed, must transfer to appropriate unit size within 30 days of availability

      • If no appropriate unit size exists, must vacate


Surviving hh member
SURVIVING HH MEMBER TENANTS

For elderly HH in elderly project only!

  • May continue occupancy, regardless ofage, if:

    • Same criteria as “remaining HH member”; BUT

    • May remain in unit

      • Should transfer to appropriate unit size

      • May remain in unit if over-housed but appropriate unit size does not exist

      • If unit has accessibility features no longer needed, must transfer to non-accessible unit within 30 days of applicant/tenant applying for accessible unit.


PART 2 TENANTS

APPLICATIONS

&

WAITING LIST MAINTENANCE


Are applicants properly informed of where and when applications may be obtained and submitted?

Does the application provide adequate information to determine the applicant’s place on the waiting list?

Are applications processed in a timely manner?

Are ineligible applicants adequately notified of their appeal rights?

Is adequate documentation available to determine compliance with applicant processing requirements?


Are applicants properly informed of where and when applications may be obtained and submitted
Are applicants properly informed of where and when applications may be obtained and submitted?

  • Must establish place and time for accepting applications

  • Should be posted in central location at property

  • Must be addressed in the Management Plan

  • Must be addressed in the AFHMP

  • Should be communicated in marketing


Does the application provide adequate information to determine the applicant’s place on the waiting list?

  • Names of all HH members, birthdates & current address

  • HH Income, Asset & Adjustment data

  • Consent to Release Wage Matching

  • Consent to Verify Employment

  • Indication of need for accessible unit and/or Disability Assistance adjustment to income

  • Certification the unit will be primary residence

  • SSN for all HH members age 6 and older

  • Citizenship/Eligible Immigration certification – LH only

  • Signature and date

  • Race, Ethnicity & Gender disclosure (below signature line)

  • Fair Housing statement (UL 11/9/12)

  • Fair Housing & Accessibility logotypes


Application
APPLICATION determine the applicant’s place on the waiting list?

  • Must

    • Provide written list of all information needed to be considered complete

    • Advise priority cannot be established until all information is received

  • Verification not necessary to be considered complete


Applications fair housing restrictions
APPLICATIONS determine the applicant’s place on the waiting list?FAIR HOUSING RESTRICTIONS

It is unlawful to inquire of the presence or severity of a disability, EXCEPT to:


Applications fair housing restrictions1
APPLICATIONS determine the applicant’s place on the waiting list?FAIR HOUSING RESTRICTIONS

  • Determine eligibility for

    • Designated units or programs

    • Adjustment to income for elderly/disabled status

    • Priority for specific units

  • Determine if applicant is a current user of illegal substances, has prior conviction for use, manufacture, or distribution of illegal substances, or has successfully completed or is currently enrolled in a substance abuse recovery program.


Applications fair housing restrictions2
APPLICATIONS determine the applicant’s place on the waiting list?FAIR HOUSING RESTRICTIONS

  • Disability related questions must be asked of ALL applicants

  • May verify disability only AFTER applicant/tenant requests a disability be considered


Are applications processed in a timely manner
Are applications processed in a timely manner? determine the applicant’s place on the waiting list?

10 DAYS

Provide written notification to applicant of disposition of application


Application disposition
APPLICATION DISPOSITION determine the applicant’s place on the waiting list?

  • Incomplete

  • Offer a unit

  • Placed on waiting list

  • Rejected


Are ineligible applicants adequately notified of their appeal rights
Are ineligible applicants adequately notified of their appeal rights?

  • Notify in writing

  • Outline reason for rejection

  • Include FCRASummary of Rights

  • Include Grievance and Appeal Rights & Procedures

    • 5 days informal meeting

    • 10 days to request a hearing

  • Deliver certified-return receipt or hand deliver with signed acknowledgement of receipt


Is adequate documentation available to determine compliance with applicant processing requirements
Is adequate documentation available to determine compliance with applicant processing requirements?

  • Application cover letter

  • Application – Date/Time Stamped

  • Race/Ethnicity Data form

  • Authorization to Verify Employment – all adults

  • Consent to Release Wage Matching – all adults

  • Citizenship/Eligible Immigration Status – LH only

  • Application Status/Acceptance notifications


Application documentation
APPLICATION DOCUMENTATION with applicant processing requirements?

  • Paper

    • Date/time stamped upon receipt

    • Keep copies of notifications to applicant

  • Verbal

    • Document and keep with application

  • Record on Waiting List

    • Ensure dates/times recorded match with the paper copy date/time stamp


Application retention
APPLICATION RETENTION with applicant processing requirements?

  • Inactive (withdrawn from wait list)

    • The longer of 3 years or to next supervisory review

  • Active

    • Until withdrawn + the longer of 3 years or next supervisory visit; or

    • If become tenant, retain in tenant file


Waiting list maintenance
WAITING LIST MAINTENANCE with applicant processing requirements?

  • All applications must be placed on the waiting list

    • Regardless of disposition, complete/incomplete or eligible/ineligible

  • Document date/time when completed application received

  • Document any activity and changes to application with date/time/explanation

  • Document final disposition of application


Waiting list maintenance1
WAITING LIST MAINTENANCE with applicant processing requirements?

  • Date/time when completed application received

  • Name

  • Race/Ethnicity (Tenant)

  • Unit size(s)

  • Income level (V, L, M)

  • RA Eligibility

  • Need for accessible unit

  • Farm laborer status (LH only)

    • Active, Disabled/Retired local, Disabled/Retired non-local)

  • LOPE or FEMA

  • Room for notations


PART 3 with applicant processing requirements?

TENANT SELECTION

&

UNIT ASSIGNMENT


Tenant selection
TENANT SELECTION with applicant processing requirements?

1st Unit Size

2nd Income Level

1st= VL

2nd= L

3rd= M

3rd Category/Priority Level

(Accessible unit, LOPE)

First Come-First Served basis by date/time completed application was received within a category or priority (NA Labor Housing)


Waiting list priorities
WAITING LIST PRIORITIES with applicant processing requirements?

Rank by VL, L then M within each category

  • Vacant non-accessible units 1st to in-place tenant who is over/under-housed

  • Vacant accessible units

    • 1st to in-place tenant needing features

    • 2nd to applicant needing features from any income, with priority to VL, then L, then M

    • May offer unit larger than required


Waiting list priorities1
WAITING LIST PRIORITIES with applicant processing requirements?

Rank by VL, L then M within each category

  • LOPE & FEMA have priority over any other applicants within their income group, regardless of unit size needed

    • May offer unit larger than required

  • LIHTC may leave unit vacant for LIHTC eligible applicant

  • HUD Section 8 may use HUD’s priorities


Selecting when ra available
SELECTING WHEN RA AVAILABLE with applicant processing requirements?

  • VL has priority in any list or category

  • Low is OK if no RA-eligible tenant in occupancy and no VL applicant on wait list

  • Moderate-income are never RA eligible


Tenant selection in lh with or without ra
TENANT SELECTION IN LH with applicant processing requirements?(with or without RA)

  • Off-Farm Categories

    1st Active Farm Laborer HH

    2nd Disabled/Retired domestic farm laborer who was active in local area at time of disability/ retirement

    3rd Other Disabled/Retired farm laborer who was not active in the local area at time of disability/retirement


Tenant selection in lh
TENANT SELECTION IN LH with applicant processing requirements?

  • Within each category: VL, then L, then M

  • Exhaust one category before going to the next

  • Disabled has priority over Retired in any given category


PART 4 with applicant processing requirements?

BASICS OF

CERTIFICATIONS


Basics
BASICS with applicant processing requirements?

  • Certifications are a requirement of eligibility for occupancy and for benefits

  • A certification must be executed prior to occupancy and annually thereafter

  • Borrowers must verify and document all income, assets, expenses, deductions, family characteristics and any other factors that affect eligibility or level of assistance.


Basics1
BASICS with applicant processing requirements?

  • Form RD 3560-8, Tenant Certification, is the means by which these verified factors are documented

  • A certification must be signed by both tenant and borrower on/before its effective date

    • Tenant signature certifies to accuracy of information provided (names, birthdates, income, assets, etc)

    • Borrower certifies that all the information recorded on RD form 3560-8 has been verified

  • Certifications are effective for 12 months


Name the three types of certifications with applicant processing requirements?.

Initial Certification

Annual Recertification

Interim Recertification


Types of certifications
TYPES OF CERTIFICATIONS with applicant processing requirements?

  • Initial Certification

    • Completed prior to moving into property

    • Must verify all factors affecting eligibility & level of assistance

    • Effective for 12 months


Types of certifications1
TYPES OF CERTIFICATIONS with applicant processing requirements?

  • Annual Recertification

    • Completed annually

    • Must verify all factors except those not subject to change (i.e., name, birthdate, SS#)

    • Effective for 12 months


Types of certifications2
TYPES OF CERTIFICATIONS with applicant processing requirements?

  • Interim Recertification

    • Completed prior to expiration of existing certification

    • Must verify all factors except those not subject to change

    • Creates a new 12 month certification period and changes Annual Recertification date


Effective dates
EFFECTIVE DATES with applicant processing requirements?

  • Initial Certifications (Move-Ins)

    • 1st day of month following initial entry to property

    • If MI is on the 1st, effective date is same as move-in

      If MI is June 7, what is the effective date of the certification?

      July 1


Effective dates1
EFFECTIVE DATES with applicant processing requirements?

  • Annual Recertification

    • Certification expires on the last day of the 12 month period

    • AR effective date is the 1st day of month following expiration

      If the current certification was effective August 1, 2013 what will be the effective date of the next Annual Recertification?

      August 1, 2014


Effective dates2
EFFECTIVE DATES with applicant processing requirements?

  • Interim Recertification

    • Effective on 1st day of month following receipt of verifications

    • Must complete within 30 days of tenant notification of change

      If tenant reports a change on May 9, and verifications are received June 3, what will be the effective date of the Interim Recert?

      July 1


Submission time frames
SUBMISSION TIME FRAMES with applicant processing requirements?

  • Due on 10th of month following effective date

  • If late, overage is charged

  • Tenant at fault = Must attempt to recapture the monies

  • Borrower at fault = Overage must be paid from non-project funds


ANNUAL with applicant processing requirements?

RECERTIFICATIONS


Tenant responsibilities
TENANT RESPONSIBILITIES with applicant processing requirements?

  • Provide income, asset & household information

  • Authorize borrower to verify information

  • If tenant fails to perform responsibilities

    • Charge Note Rate rent

    • Commence Termination of Tenancy


Borrower responsibilities
BORROWER RESPONSIBILITIES with applicant processing requirements?

  • Maintain tracking & monitoring system to ensure timely initiation and completion of certifications

  • Obtain verification of all factors

  • Send appropriate notices to tenant

  • Notify tenant of new rent in a timely manner

  • Submit certifications to RD within 10 days of effective date

  • Retain for 3 years or to next supervisory visit, whichever is greater


Ar notices
AR NOTICES with applicant processing requirements?

  • Initial Notice

    • Send 75-90 days preceding expiration of current certification

    • Hand-delivery or 1st class mail

    • Retain copy in tenant file with date mailed or delivered


Ar notices1
AR NOTICES with applicant processing requirements?

  • Final Notice

    • Send 30 days preceding expiration of current certification

    • Advise of consequences for failure to comply

  • Retain copy of notice in tenant file with date mailed or delivered

  • Recommend send 30-day notice of rent increase under separate cover


Failure to recertify
FAILURE TO RECERTIFY with applicant processing requirements?

TENANT AT FAULT

  • Within 10 days of certification expiration, send to Tenant and RD written notification that:

    • Termination proceedings are being initiated; and

    • Tenant to be charged Note Rate rent until lease is terminated

  • Must have documentation that recertification notices were sent timely (send copies to RD)


INTERIM with applicant processing requirements?

RECERTIFICATIONS


True or false
TRUE or FALSE? with applicant processing requirements?

  • A tenant must report to you if their income increases by $40 month.

    TRUE


True or false1
TRUE or FALSE? with applicant processing requirements?

You must perform an Interim Recertification if you learn a tenant cashed in their Treasury Bill worth $4,500.

FALSE


Yes or no
YES or NO? with applicant processing requirements?

Your tenant tells you his brother moved into his apartment two months ago. This is news to you. Should you perform an Interim Recertification to include the brother as a household member at the time you learn of this?

NO


Tenant responsibilities1
TENANT RESPONSIBILITIES with applicant processing requirements?

  • Report any changes in household status that could affect eligibility or level of assistance

    • Income increases or decreases

    • Changes in household size

    • Changes to household adjustments (i.e., child care, medical, disability assistance, etc.)

    • Change in household or member status (member turns 18 or 62, or member becomes disabled, etc.)


Borrower responsibilities1
BORROWER RESPONSIBILITIES with applicant processing requirements?

  • Recertify immediately only if tenant reports:

    • Income change of $100/month or more (increase or decrease)

    • At tenant request for changes of $50/month or more (increase or decrease)

  • Complete the recertification within 30 days of notification by tenant

  • Submit to RD within 10 days of effective date


Penalties for failure to report
PENALTIES FOR FAILURE TO REPORT with applicant processing requirements?

  • Cannot charge Note Rate rent

  • Cannot terminate tenancy

  • Recertify retroactively as if tenant had reported timely

  • Report failure to RD

  • Make every effort to recapture unauthorized assistance from tenant


A FEW TIPS with applicant processing requirements?


  • Maintain a tracking system with applicant processing requirements?

    • Use Certification/Recertification Checklists (CARH Model Documents)

  • Use a working file until certification is complete (including signatures)

    • Do not place into Tenant File until complete

  • On Recertification Notices to tenant, provide:

    • A date and time for recert interview

    • A list of all potential documents tenant should bring

    • Advise signatures are required to render a certification complete

  • Make copies of recert notices and date stamp them with date mailed/delivered


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