Agenda - Council Work Session - 01/10/2012

Home

G. Unacceptable Practices 1. Unapproved Transfer of Ownership: Any unapproved change or transfer of ownership from selection through five years after the project's new construction/rehabilitation placed in service date will have an effect on all individuals/entities from the development and management team on each side of the transfer that submit applications in future HTC rounds. These entities may be penalized as follows: For four funding rounds from the date Minnesota Housing discovers an unapproved change or transfer of ownership: a. First Transfer (-10 points on each application submittal) b. Two or More Transfers (-25 points on each application submittal) In addition, if Minnesota Housing becomes aware of a transfer of ownership by an individual or entity without proper notification and approval by Minnesota Housing, Minnesota Housing reserves the right to determine that all parties involved in the transfer will not be eligible for participation in Minnesota's HTC program for a period of ten years. 2. Displacement of Section 8 Tenants: Minnesota Housing will not accept applications that have displaced (or will displace) Section 8 tenants in a housing project because rents will be increased above the Section 8 Payment Standard Rent limit. Rehabilitation projects that have existing Section 8 tenants may not increase those rents (in Section 8 units only) above HUD's Payment Standard Rents after completion of rehabilitation. a. Minnesota Housing has agreed to partner with the local HUD area office to determine if tenants of rehabilitation projects; 1. were displaced prior to application; 2. are displaced after rehabilitation has been completed. b. If Minnesota Housing and the local HUD area office agree that intentional displacement of Section 8 tenants has occurred, with exception given to lease violations by the tenant, Minnesota Housing will: 1. reduce or rescind the reservation/allocation of the tax credits to the project prior to issuance of 8609; 2. assess a -25 point penalty to all parties involved in ownership/management of the project for four funding rounds following notification of the assessment of the negative points by Minnesota Housing. This also applies to tax-exempt tax credit projects, owners, and managers. 3. Changes to Project: The award of tax credits is based upon information provided in the application and the preliminary plans submitted with the application. Until the property is placed in service, any material changes to the project or building design (i.e., changes in unit mix or unit size, that affect applicable Design Standards for HTC 2012, or design features required for preference points) as submitted in the application require written notification to and approval from Minnesota Housing. Any changes that have not been previously approved by Minnesota Housing could result in a proportional loss of tax credits up to the full amount of the allocation as well as the assessment of penalty points to the owner/developer of up to -25 points. 4. Late 8609 Application Submissions Resulting in the Loss of Tax Credit Authority to the State: When Minnesota Housing becomes aware that a late submission of a complete and acceptable 8609 application package by a development's owner/agent results in the loss of any volume of housing tax credit authority to the state of Minnesota, Minnesota Housing reserves the right to determine that all 7 12012 Housing Tax Credit Procedural Manual Rev. 04/2011