Reservation & Carryover Gross Rent Floor Election Commitment 10% Certification PLACED IN SERVICE...
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Transcript of Reservation & Carryover Gross Rent Floor Election Commitment 10% Certification PLACED IN SERVICE...
![Page 1: Reservation & Carryover Gross Rent Floor Election Commitment 10% Certification PLACED IN SERVICE (PIS)](https://reader036.fdocuments.net/reader036/viewer/2022083006/56649f355503460f94c5366c/html5/thumbnails/1.jpg)
Reservation &
Carryover
Gross Rent Floor
Election
Commitment
10% Certification
PLACED IN SERVICE (PIS)
![Page 2: Reservation & Carryover Gross Rent Floor Election Commitment 10% Certification PLACED IN SERVICE (PIS)](https://reader036.fdocuments.net/reader036/viewer/2022083006/56649f355503460f94c5366c/html5/thumbnails/2.jpg)
PLACED IN SERVICE
Housing Authorities evaluate the project following the date all of the buildings in a project are PIS, including a site visit if deemed necessary, to ensure all program requirements have been met and to review the project prior to the issuance of IRS Form 8609.
Applications are available through the Public Housing Authorities
Michigan State Housing Development Authority (MSHDA)
www.Michigan.gov/mshda
Indiana Housing & Community Development Authority (IHCDA)
http://www.in.gov/ihcda/
![Page 3: Reservation & Carryover Gross Rent Floor Election Commitment 10% Certification PLACED IN SERVICE (PIS)](https://reader036.fdocuments.net/reader036/viewer/2022083006/56649f355503460f94c5366c/html5/thumbnails/3.jpg)
PLACED IN SERVICE
A project must be PIS by December 31 of the second calendar year following the issuance of the Carryover Allocation Agreement or the credit will be lost to the project.
If you are claiming credit for any project for the Current Year:
PIS request to issue Regulatory Agreement
Due Date…………………..any time during the year, but no later than: November 1 of Current Year
Regulatory Agreement recorded in the county in which the project is located……………………..any time during the year, but no later than:
December 31 of the Current Year
Owner’s/Contractor’s Final Cost
Certifications Due Date:…any time during the year, but no later than:
February 1 of the Following Year
If you are not claiming credit for the Current Year:
It is not necessary to submit any placed-in –service documentation prior to the end of the year.
REMINDERS You are able to submit a placed-in-service application and final cost certifications at any
time during the year.
A Regulatory Agreement must be recorded in the county in which the project is
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placed in service
All Exhibits must be tabbed in accordance with the PIS Exhibit Checklist, and placed at the end of the application
The PIS date(s) shown on the 8609(s) will be taken from the Building-by-Building page of the LIHTC application. The PIS date(s) must be on or after the date(s) shown on the temporary or final Certificate(s) of Occupancy. If the date of the temporary Certificate(s) of Occupancy. If the date of the temporary Certificate(s) of Occupancy is used, a copy of the temporary and final Certificate(s) of Occupancy must be submitted.
8609(s) will only be released upon receipt of the recorded original Regulatory Agreement and all required exhibits, including payment of all fees. Cost Certifications must be completed in accordance with LIHTC guidelines.
Please thoroughly read the PIS Instructions prior to submitting the Application and Exhibits.
![Page 5: Reservation & Carryover Gross Rent Floor Election Commitment 10% Certification PLACED IN SERVICE (PIS)](https://reader036.fdocuments.net/reader036/viewer/2022083006/56649f355503460f94c5366c/html5/thumbnails/5.jpg)
PLACED IN SERVICE
What Do I Need To Include With My Application Copy of Executed and Recorded Deed to Property
Entity Formation Documentation
First Year Credit Statement
Original Owner’s and Contractor’s Final Cost Certification
Certificates of Occupancy
Executed Limited Partnership Agreement
Copy of Executed and Recorded Permanent Mortgage and Note
Color Photograph of the Project
IRS Form 8821
Compliance Monitoring Fees
Documentation for Rental Subsidy (if applicable)
Project’s Latest Financial Audit
Green or Leed Certifications
Environmental and/or Marketing Updates
![Page 6: Reservation & Carryover Gross Rent Floor Election Commitment 10% Certification PLACED IN SERVICE (PIS)](https://reader036.fdocuments.net/reader036/viewer/2022083006/56649f355503460f94c5366c/html5/thumbnails/6.jpg)
PLACED IN SERVICE
There are certain sections of the Primary Application that frequently changes from the time a Placed in Service application is submitted to the time 8609s are issued.
Housing Units
Distribution of Rents
Low Income Tenant Targeting
Construction/Permanent Financing
Project Costs
Annual Project Expense Information
Any changes to a LIHTC project that require a re-scoring or re-evaluation of the application, in which the score falls below the category minimum threshold in which they were funded, will not be allowed from time of initial application to placed-in-service. Important to check consult your local Housing Authority.
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Placed in Service
Cost Certification
There are two types of Cost Certifications
Owner’s Cost Certification
Contractor’s Cost Certification
The purpose of the cost certification is to establish the total costs incurred by the owner and contractor in the development of a project. These reports enable the Authority to determine certain developments costs and the amount of tax credit to be allocated to the project. All costs are included in the calculation of the total development costs; however, not all such costs are necessarily recognizable in determining the eligible basis and the amount of credit to be allocated.
The Authority reserves the right to exclude from eligible basis part or any line item of expense when the amount is so high as to be out-of-line with reasonable and necessary costs for the services performed or the item supplied. In such cases, the amount allowed will be the Authority’s estimate of the “reasonable and necessary” amount as compared with comparable projects in similar areas. All expenditures must be reduced by the amounts of any kickbacks, rebates, allowances, trade discounts or other sums that the owner or the sponsor has received or is to receive.
Authority reserves the right to determine whether or not the certifications of actual costs received are satisfactory to the Authority.
Cost Certifications must be prepared and contain an Opinion of a Certified Public Accountant
Owner’s must certify the gross and net syndication proceeds applicable to the project.
Syndicators require that drafts of the Cost Certifications be submitted for review prior to submitting to the authority.
![Page 8: Reservation & Carryover Gross Rent Floor Election Commitment 10% Certification PLACED IN SERVICE (PIS)](https://reader036.fdocuments.net/reader036/viewer/2022083006/56649f355503460f94c5366c/html5/thumbnails/8.jpg)
PLACED IN SERVICE
What Are Some of the Pitfalls of Placed In Service No familiarity with the Qualified Allocation Plan, Housing Authorities Forms and
due dates related to the Placed In Service process
Submission of incomplete packages
Updates on application not completed
Submission of wrong PIS Dates
Missing documents related to financing and subsidy
Missing certifications related to Green and Leed initiatives
Not working close enough with Accountants in capturing and qualifying costs
Securing proper signoff related to third party reports (i.e. appraisals and environmentals)