The IRS released proposed regulations, effective immediately, to relax their previous compliance monitoring regulations that increased the number of units housing finance agencies (HFAs) needed to monitor. This proposed rule reinstates the previous pre-2019 policy that required HFAs to monitor the lesser of 20 percent of the units in a project or the number of units in the LIHTC Minimum Unit Sample Size Reference Chart. The minimum sample sizes in the chart correspond to the minimum sample sizes required by the Real Estate Assessment Center for inspections under HUD programs (the REAC numbers). The proposed rule is attached and available HERE.
NAHMA has strongly advocated to IRS/Treasury and partnered with industry colleagues, National Council of State Housing Agencies (NCSHA), to get relief from these regulations. While we are pleased to see the positive change, we also recognized more advocacy is needed to get relief from the “15-day notification period”. The 2019 final regulation reduced the notice period from 30 to 15 days that HFAs may provide to owners before upcoming monitoring visits. The proposed rule does not modify the notification period, which remains at 15 days. NAHMA strongly recommends members to provide comments to us on the negative impact of this notification time period, by August 20, 2020.