The LIHTC (Low Income Housing Tax Credit) program has supported and created approximately 2 million rental units since the mid-1990s, bringing a whole new wave of access to affordable housing. The benefits to Tax Credit units are ongoing, as owner operators can take advantage of tax credits and the generally reliable revenue stream. As these assets bring so much value to a property management companies’ portfolio, you will continue to see more and more LIHTC assets in the upcoming years.
LIHTC units, just like any Affordable Housing, have strict compliance regulations to ensure that properties are benefiting the intended residents. Compliance is all about data. Funding sources of any kind for affordable housing require detailed reports to be created and shared multiple times a year. There are also surprise audits for on-site observation.
As many owner operators add LIHTC units to their properties, some are sticking with their conventional property management software to manage all of their data. While this might seem like it’s saving money for properties, we’d argue that, in the end, it could have the opposite effect.
For example, your LIHTC units are going to require copious amounts of manual data entry, including 8069s and more. This is a heavy burden to put on your onsite staff, costing them plenty of time while also posing the risk of human error during data entry.
Since inception, many city, county and state agencies have also created funding sources for set asides. This adds a lot of complexity and layers to compliance. Year one of owning LIHTC units is a risk-heavy time period, as first-year compliance is crucial to keep growing your Affordable portfolio. Whether you believe your team is doing an excellent job of tracking set asides or not, layering LIHTC units with your conventional units is complicating your data.
In the grand scheme of things, having an Affordable software is going to save you from being forced to hire an additional team member to handle compliance on your LIHTC sites. Tax credit software is available for you to ensure that all data entry and management is accurate and compliant with regulations, ultimately mitigating any risks while also giving time to your staff to focus on the property's biggest needs.
Even better, ResMan’s software will provide a Compliance dashboard for you and your team members. All in one place, your staff can view recertifications, program compliance and next available unit as well as unit vacancy rule. This means your team can have more visibility around your property’s regulations and the guardrails to keep you in compliance.
To summarize, don’t just use conventional software. You need Affordable software with this functionality and to ensure don’t losing your tax credit status within the LIHTC program.
Want to save yourself from the stress and potential compliance violations? Chat with us about our Affordable software, including a real-time Compliance dashboard!
If you’re interested in ResMan as a software provider for your daily operations, book a demo to see the product up close.