The development must satisfy all low income requirements for a compliance period of 15 consecutive taxable years for owners to receive the full Low Income Housing Tax Credits (LIHTC). In addition, developments must adhere to a minimum Extended Use Period of an additional 15 years. Some developments may have committed to longer affordability periods as outlined in their Land Use Restriction Agreement (LURA). NIFA is responsible for monitoring compliance with the requirements of Internal Revenue Code (IRC) §42 for LIHTC developments in Nebraska. NIFA performs desk audits, inspects housing, and reviews tenant files. When we identify noncompliance or a disposition of a building, NIFA is required to notify the Internal Revenue Service (IRS) during the initial 15-year compliance period using Form 8823, Low Income Housing Credit Agencies Report of Noncompliance or Building Disposition.
NIFA will perform a desk audit, conduct a site visit, or review the owner's tenant files and provide the owner with a summary report of the findings. If the report indicates noncompliance, the owner is expected to respond to NIFA within 60 days from the date of NIFA's letter to provide clarification or document that the issues of noncompliance have been addressed and corrected.
If the owner is reported as out of compliance, the IRS sends a notification letter to the owner identifying the type of noncompliance reported on Form 8823. The notification letter also states that the owner should not include any nonqualified low income housing units when computing the LIHTC under IRC §42 and that the noncompliance may result in the recapture of previously claimed credits. The notification letter also instructs the owner to contact the state agency to resolve the issue.
Once the noncompliance is resolved, NIFA will file a corrected (back in compliance) Form 8823.
Tax Credit developments allocated federal low income housing tax credits in 1990 and thereafter may be eligible to make a qualified contract request to NIFA in 2005 and beyond. This can occur, at the Development Owner’s election, any time after year 14 in a 30-year Land Use Restriction Agreement (extended use agreement or “LURA”) or after year 29 in a 45-year LURA.
If a Development Owner desires to sell the property under the qualified contract process such Development Owner must notify NIFA using the process outlined below. Once complete and proper notice has been received, NIFA has one year to find a buyer for the project at a pre-determined price, not to exceed the “Qualified Contract Price” (QCP). The qualified purchaser may be a non-profit or for-profit entity that agrees to maintain the affordable housing units and fulfill all requirements of the LURA for the remainder of the extended use period.
See Developments Currently Eligible for a Qualified Contract Request. Development Owners who believe the development they own is eligible for the option year should contact NIFA. Development Owners who elect to exercise their qualified contract process must complete the forms located under the Qualified Contract Process dropdown and provide all required due diligence documentation listed therein.
Upon receipt of a Development Owner's request to exercise its option year (Notification Letter and Qualified Contract Price Form and Worksheets), NIFA staff will proceed as follows:
In order for NIFA to assist in making information available to potential purchasers of affordable housing properties, the Development Owner must cooperate in such effort and is responsible for providing certain information. At a minimum, the Development Owner must provide the following to NIFA:
number of buildings
number of units
rent amounts per unit
description of all improvements
description of all services
description of current staff/management
Development Owner Responsibilities
In addition to the above, the Development Owner must agree to the following requirements:
Development Owner Certifications and Commitment
The Development Owner must certify to the following:
If NIFA finds a prospective purchaser willing to present an offer to purchase the Development for an amount equal to the Qualified Contract Price, the Development Owner must agree to enter into a commercially reasonable form of earnest money agreement or other contract of sale for the Development and provide a reasonable time for necessary due diligence and closing of the purchase.
NOTE: In connection with the process described herein, NIFA is not acting as an agent for any Development Owner and NIFA is not responsible for finding a buyer for any Development and is not representing any Development Owner in the sale of such Development Owner’s Development. Rather, NIFA is simply sharing information about the Development for the convenience of the respective Development Owners who are attempting to sell their developments at a Qualified Contract Price.
If NIFA does not present a Qualified Contract before the one year period expires, the restrictions of the LURA will cease; provided that the Development will remain subject to the requirements set forth in Section 42(h)(6)(E)(ii); that is, for a three year period commencing on the termination of the extended use period, the Development Owner may not (i) evict or terminate a tenancy (other than for good cause) of an existing tenant of any low income unit, or (ii) increase the gross rent with respect to any low income unit except as permitted under Section 42 of the Code, as well as the requirements of the LURA.
None at this time.
Owners receiving LIHTC in 1990 or later years must continue to maintain the low income occupancy of their developments for an additional 15+ years beyond the end of the 15-year compliance period. Developments should reference their Land Use Restriction Agreement (LURA) for any commitment made to a longer Extended Use Period. Owners committing compliance violations may be subject to administrative and judicial sanctions pursuant to remedies afforded NIFA in the LIHTC LURA.
Each year, NIFA offers a LIHTC Compliance Training event!
This annual LIHTC Compliance Training is a comprehensive course specifically designed to assist affordable housing professionals with becoming skilled in project compliance. The course is customized to highlight Nebraska state specific policies and procedures in addition to federal requirements.
In order to receive points on the LIHTC application you must attend the Compliance Training.
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