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First StepsFirst Steps

Determine Eligibility, Chapter 7Determine Eligibility, Chapter 7Conduct Initial InterviewConduct Initial Interview

Complete Application, Complete Application,

Determine Household size and annual incomeDetermine Household size and annual income

Verification Process, Verification Process,

Total Household Income CalculationTotal Household Income Calculation

TIC, TIC Addendum, and LeaseTIC, TIC Addendum, and Lease

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ApplicationApplication

Chapter 7-1Chapter 7-1Application must reflect detailed income, Application must reflect detailed income, asset , and student status informationasset , and student status informationManagers should never accept an Managers should never accept an incomplete applicationincomplete applicationComplete separate applications for each Complete separate applications for each adult household member unless the adult household member unless the application addresses sufficient application addresses sufficient information regarding additional adults information regarding additional adults that will be living in the unitthat will be living in the unit

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Exhibit NV-2 Exhibit NV-2 Employment VerificationEmployment Verification

Chapter 7 D.Chapter 7 D.

Must be fully completeMust be fully complete

Must be current NHD exhibitMust be current NHD exhibit

Never send through the Never send through the applicant/residentapplicant/resident

Must be mail or fax to & from the sourceMust be mail or fax to & from the source

If faxed, fax banner must include date, If faxed, fax banner must include date, company name, & fax #. company name, & fax #.

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Exhibit NV-2a Exhibit NV-2a Fax Header Clarification FormFax Header Clarification Form

Utilized to verbally verify/clarify fax header Utilized to verbally verify/clarify fax header information onlyinformation only

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Certification of Tip Income NV-2bCertification of Tip Income NV-2b

Chapter 7Chapter 7The NV-2b can be used as a last resort The NV-2b can be used as a last resort onlyonly

Using the NV-2b means tip income was not Using the NV-2b means tip income was not provided on the VOE (NV-2) and;provided on the VOE (NV-2) and;Was not reflected on current pay stubs (must Was not reflected on current pay stubs (must provide stubs that show no tips)provide stubs that show no tips)

Continued………Continued………

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Certification of Tip Income NV-2bCertification of Tip Income NV-2b

Examples of Tip Earning OccupationsExamples of Tip Earning OccupationsFood Servers, Waiters, Waitresses, BusboysFood Servers, Waiters, Waitresses, Busboys

Cosmetology FieldCosmetology Field

Bellmen, ValetsBellmen, Valets

Casino WorkersCasino Workers

Cab Drivers, Limousine DriversCab Drivers, Limousine Drivers

Bartenders, Bar backsBartenders, Bar backs

Massage TherapistsMassage Therapists

Exotic Dancers Exotic Dancers

Pool AttendantsPool Attendants

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Alternate Verification MethodsAlternate Verification Methods

Chapter 7 D.Chapter 7 D.

Utilize only when written verification cannot be Utilize only when written verification cannot be obtained or is incompleteobtained or is incomplete

4 – 6 current check stubs or earning statements 4 – 6 current check stubs or earning statements

The work numberThe work number

A statement from employer A statement from employer

Alternate verification & anticipated increaseAlternate verification & anticipated increase

File must reflect attempts to obtain exhibit NV-2 File must reflect attempts to obtain exhibit NV-2 (at least one attempt required)(at least one attempt required)

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Exhibit NV-2c & 2c.1Exhibit NV-2c & 2c.1Self-EmploymentSelf-Employment

Chapter 7 E.Chapter 7 E.

Complete NV-2c for existing businessComplete NV-2c for existing business

Copies of income tax return including Copies of income tax return including Form 1040 Schedule C for business Form 1040 Schedule C for business income (profit & loss)income (profit & loss)

Complete NV-2c.1 for new business – Mgr Complete NV-2c.1 for new business – Mgr is responsible for follow up as requiredis responsible for follow up as required

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Other IncomeOther Income

Chapter 7 E.Chapter 7 E.

Social Security, Pension, SSI, SSDSocial Security, Pension, SSI, SSD

Recurring Contributions and Gifts use NV-2h Recurring Contributions and Gifts use NV-2h NEW FORMNEW FORM

Scholarship, Grants, & Veteran Admin. BenefitsScholarship, Grants, & Veteran Admin. Benefits

Income for StudentsIncome for Students

Alimony/Child Support use form NV-2fAlimony/Child Support use form NV-2f

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Exhibit NV-2dExhibit NV-2dUnemployed/Non-Employed Applicants Unemployed/Non-Employed Applicants

AffidavitAffidavitChapter 7 E.Chapter 7 E.

Unemployed personsUnemployed persons

Non-employed personsNon-employed persons

Anticipated IncomeAnticipated Income

Unemployment benefitsUnemployment benefitsAnnualize regardless of remaining weeksAnnualize regardless of remaining weeks

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Exhibit NV-2eExhibit NV-2eCertification of Zero IncomeCertification of Zero Income

Chapter 7 D.Chapter 7 D.

Each adult resident claiming zero income Each adult resident claiming zero income must completemust complete

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Exhibit NV-2fExhibit NV-2fAffidavit of Alimony/Child SupportAffidavit of Alimony/Child Support

Chapter 7 E.Chapter 7 E.Utilize when alimony and/or child support is being Utilize when alimony and/or child support is being received or anticipated within the following 12 received or anticipated within the following 12 months.months.

Divorce Decree (entire Decree), orDivorce Decree (entire Decree), orLetter (notarized) from person paying support, orLetter (notarized) from person paying support, orLocal Court, orLocal Court, orPayment records from the DA’s office, orPayment records from the DA’s office, orLetter from applicants attorney, orLetter from applicants attorney, orCopy of most recent support checks (need verification of Copy of most recent support checks (need verification of how often received)how often received)

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AssetsAssetsChapter 7 F. of NHD manual and Chapter 7 F. of NHD manual and

Asset inclusions / exclusions see HUD 4350.3 Asset inclusions / exclusions see HUD 4350.3

Total household assets less than $5000Total household assets less than $500033rdrd party verification and imput of asset is not party verification and imput of asset is not required (except HOME units)required (except HOME units)All assets and income from assets must be All assets and income from assets must be listed on TIC and added to household incomelisted on TIC and added to household income

IF IF totaltotal household assets = $5000 or over household assets = $5000 or over33rdrd party verification of party verification of eacheach individual asset is individual asset is requiredrequired

Continued……….Continued……….

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Assets Cont.Assets Cont.

Typical AssetsTypical AssetsChecking / SavingsChecking / SavingsCD’s, Treasury Bills, Savings BondsCD’s, Treasury Bills, Savings BondsInvestment / Retirement AccountsInvestment / Retirement AccountsTrust FundsTrust FundsCash on handCash on handReal EstateReal Estate

Continued……….Continued……….

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Assets Cont.Assets Cont.

Real estate retainedReal estate retainedValue - appraisal or real estate comparables Value - appraisal or real estate comparables utilizing the highest computilizing the highest comp

Principal balancePrincipal balance

Real estate contract or other (if being sold)Real estate contract or other (if being sold)

Rental agreement (if being rented)Rental agreement (if being rented)

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Assets Cont.Assets Cont.Selling HomeSelling Home

Market Sale Value Market Sale Value $205,000$205,000Mtg. BalanceMtg. Balance - $49,500 - $49,500Selling Expenses Selling Expenses - $10,500- $10,500Net to Seller = $145,000Net to Seller = $145,000X Imputed ValueX Imputed Value

.06%.06% = = $870$870

Renting HomeRenting HomeAnnual Rent $10,500Annual Rent $10,500Less Mtg. -$5,700Less Mtg. -$5,700

Interest only)Interest only)

Less Tax/Ins -$1,296Less Tax/Ins -$1,296Less Maint. -$1,200Less Maint. -$1,200Less Vacancy -Less Vacancy -$875$875

Net to OwnerNet to Owner $1,429$1,429

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Assets - Real Estate Cont.Assets - Real Estate Cont.

Real estate disposed of within two years Real estate disposed of within two years prior to move-in - Use NV-2i prior to move-in - Use NV-2i NEW FORMNEW FORM

Settlement Statement (HUD-1)Settlement Statement (HUD-1)

Recorded Quit ClaimRecorded Quit Claim

Foreclosure docsForeclosure docs

Divorce Decree Settlement, etc.Divorce Decree Settlement, etc.

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Exhibit NV-3Exhibit NV-3Student Status CertificationStudent Status Certification

Chapter 7 K.Chapter 7 K.Households comprised entirely of full-Households comprised entirely of full-time students are not eligible unless the time students are not eligible unless the household meets one of five exceptionshousehold meets one of five exceptions

IRS defines fulltime asIRS defines fulltime as 12 credit hours per semester 12 credit hours per semester

Fulltime 5 months per yearFulltime 5 months per year even if even if graduated prior to applying for TC unit.graduated prior to applying for TC unit.

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Exhibit NV-4Exhibit NV-4Verification of Need for Live-in AidVerification of Need for Live-in Aid

Chapter 7 B. Chapter 7 B. ((Persons not included as household Persons not included as household members)members)

33rdrd party verify the need (initially & annually party verify the need (initially & annually thereafter)thereafter)

Can not be spouse or minor childCan not be spouse or minor child

Is not obligated for financial support of Is not obligated for financial support of residentresident

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Exhibit NV-4Exhibit NV-4Verification of Need for Live-in AidVerification of Need for Live-in Aid

Living in unit solely to provide necessary care to Living in unit solely to provide necessary care to residentresidentWould otherwise not be living in unitWould otherwise not be living in unitNo survivorship rights to unit No survivorship rights to unit Aide must pass all criminal/background checks Aide must pass all criminal/background checks (except landlord reference and credit) required for (except landlord reference and credit) required for all residentsall residentsOwner has right to evict Aide that violates any Owner has right to evict Aide that violates any community rulescommunity rules

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Exhibit Exhibit NV-1NV-1 (TIC) (TIC)Instructions, see NV-1b & Chapter 7 Instructions, see NV-1b & Chapter 7 of NHD Compliance Manualof NHD Compliance ManualPart I “Development data”Part I “Development data”Part II “Household composition” Part II “Household composition” chapter 7(B)chapter 7(B)

Persons not includedPersons not includedPersons temporarily absentPersons temporarily absentFull-time Student (chapter 7(K)Full-time Student (chapter 7(K)

Continued………..Continued………..

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Exhibit Exhibit NV-1NV-1 (TIC) cont. (TIC) cont.

Part III “Gross Annual Income”Part III “Gross Annual Income”Employment & WagesEmployment & WagesSocial Security/Pensions: Chapter 7(E)Social Security/Pensions: Chapter 7(E)(3)(3)Public Assistance: Amount of income Public Assistance: Amount of income received such as TANFreceived such as TANFOther Income: Chapter 7(E)(1), (4), (5), Other Income: Chapter 7(E)(1), (4), (5), (6), & (8)(6), & (8)

Continued………….Continued………….

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Exhibit Exhibit NV-1NV-1 (TIC) cont. (TIC) cont.

Part IV “Income from Assets”Part IV “Income from Assets”Chapter 7 F.Chapter 7 F.

Household Certification and SignaturesHousehold Certification and SignaturesAfter all verification of income and assets have been After all verification of income and assets have been received, each household member age 18 and older received, each household member age 18 and older must sign & date the TIC. must sign & date the TIC.

Continued………Continued………

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Exhibit Exhibit NV-1NV-1 (TIC) cont. (TIC) cont.

Part V “Determination of Income Part V “Determination of Income Eligibility”Eligibility”

Income limit per Family sizeIncome limit per Family size

Check the appropriate % of Income Check the appropriate % of Income Restriction (Declaration of Restricted Restriction (Declaration of Restricted Covenants)Covenants)

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Exhibit Exhibit NV-1NV-1 (TIC) cont. (TIC) cont.

Part VI “Rent” Part VI “Rent” Chapter 8Chapter 8

Tenant paid rent: out of pocket amountTenant paid rent: out of pocket amount

Rent Assistance: Amount of assistance, Rent Assistance: Amount of assistance, if anyif any

Utility Allowance: Chapter 8 E., enter 0 if Utility Allowance: Chapter 8 E., enter 0 if owner pays all utilitiesowner pays all utilities

Max rentMax rent

Meets rent % restriction: Chapter 8 B.Meets rent % restriction: Chapter 8 B.

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Exhibit Exhibit NV-1NV-1 (TIC) cont. (TIC) cont.

Part VII Student StatusPart VII Student StatusChapter 7 K. & NV-1bChapter 7 K. & NV-1b

Any exception requires 3Any exception requires 3rdrd party verification party verification

Part VIII Program Type Part VIII Program Type Exhibit NV-1b Exhibit NV-1b

Continued………Continued………

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Exhibit Exhibit NV-1NV-1 (TIC) cont. (TIC) cont.

Signature of Owner/RepresentativeSignature of Owner/RepresentativeOwner’s or owner’s representative must sign and Owner’s or owner’s representative must sign and date the TIC immediately following execution by date the TIC immediately following execution by the resident(s). the resident(s).

The responsibility of documenting and determining The responsibility of documenting and determining eligibility (including completing and signing the eligibility (including completing and signing the Tenant Income Certification form) and ensuring Tenant Income Certification form) and ensuring such documentation is kept in the tenant file is such documentation is kept in the tenant file is extremely important and should be conducted by extremely important and should be conducted by someone well trained in tax credit compliance. someone well trained in tax credit compliance.

Continued………Continued………

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Exhibit NV-1a TIC AddendumExhibit NV-1a TIC Addendum

Located on the NHD websiteLocated on the NHD website

Must accompany the TICMust accompany the TIC

Instructions see NV-1bInstructions see NV-1b

Required at initial certification and 1Required at initial certification and 1stst anniversary re-certificationanniversary re-certification

All sections must be acknowledged and All sections must be acknowledged and when applicable 3when applicable 3rdrd party verification party verification

Continued………Continued………

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Exhibit NV-1a TIC Addendum, Cont.Exhibit NV-1a TIC Addendum, Cont.

Students: Chapter 7 K.Students: Chapter 7 K.

Child Support/Alimony: Chapter 7 E. Child Support/Alimony: Chapter 7 E.

Assets: chapter 7 F.Assets: chapter 7 F.

All adult household members and All adult household members and authorized project representative must authorized project representative must sign and date on the same day as the TICsign and date on the same day as the TIC

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Re-CertificationRe-Certification

Chapter 7 I.Chapter 7 I.

11stst anniversary & non 100% LIHTC projects anniversary & non 100% LIHTC projectsSame verification process as initial move-inSame verification process as initial move-in

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Exhibit NV-1cExhibit NV-1cAlternate CertificationAlternate Certification

Chapter 7Chapter 7Utilized annually after two years of tenancyUtilized annually after two years of tenancy

Must be 100% LIHTC projectsMust be 100% LIHTC projects

Post 1Post 1stst year anniversary year anniversary Each qualifying household must complete the Each qualifying household must complete the NHD Alternate Certification Exhibit NV-1cNHD Alternate Certification Exhibit NV-1c

NHD reserves the right to revoke if excessive NHD reserves the right to revoke if excessive noncompliance occursnoncompliance occurs

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LeaseLeaseChapter7 H.Chapter7 H.

All Households of LIHTC units must be All Households of LIHTC units must be certified and under leasecertified and under leaseTerm must be at least 6 months except Term must be at least 6 months except for transitional housingfor transitional housingVery important:Very important: Management/owner is Management/owner is responsible for ensuring lease meets responsible for ensuring lease meets allall state requirements as well as program state requirements as well as program requirementsrequirements

Continued……….Continued……….

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LeaseLeaseNHD Lease guidelinesNHD Lease guidelines

Legal name of Legal name of allall occupants (including minors) occupants (including minors)

Unit # and street addressUnit # and street address

Net monthly rent amountNet monthly rent amount

Lease termLease term

Address any issues that may affect the unit Address any issues that may affect the unit rent (rent limits, U/A’s, etc)rent (rent limits, U/A’s, etc)

Section 42 Program (verbally explain what will Section 42 Program (verbally explain what will be expected)be expected)

Signed by head, spouse, or co-head.Signed by head, spouse, or co-head.

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Affordability PeriodsAffordability Periods

LIHTC requires 30 year minimum for LIHTC requires 30 year minimum for monitoring to ensure compliance unless monitoring to ensure compliance unless the property rec’d preference points for a the property rec’d preference points for a longer period (check DRC’S)longer period (check DRC’S)HOME/LIHTF may have periods from 5-20 HOME/LIHTF may have periods from 5-20 years (depending on type of projects and years (depending on type of projects and amount of dollars invested)amount of dollars invested)

Projects with TC/HOME/LIHTF may be Projects with TC/HOME/LIHTF may be subject to two sets of Affordability Periodssubject to two sets of Affordability Periods

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UPCSUPCSHUD’s Uniform Physical Condition StandardsHUD’s Uniform Physical Condition Standards

Chapter 5 F.Chapter 5 F.Effective July 1, 2004Effective July 1, 2004

Requires projects to be in decent, safe, and Requires projects to be in decent, safe, and sanitary condition and in good repair.sanitary condition and in good repair.

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Annual Owner ReportsAnnual Owner ReportsDue January 31Due January 31stst of each year of each year

Chapter 4(B)(1)Chapter 4(B)(1)Exhibit C – Owner's Certificate of Continuing Exhibit C – Owner's Certificate of Continuing Program Compliance Program Compliance

Chapter 4(B)(2)Chapter 4(B)(2)Exhibit C.1 – Contact Information FormExhibit C.1 – Contact Information Form

Bond Report – Certification of Continuing Bond Report – Certification of Continuing Program Compliance (Regulatory Agreement)Program Compliance (Regulatory Agreement)

Chapter 10Chapter 10COL manual can be downloaded from the NHD COL manual can be downloaded from the NHD websitewebsite