Watch Out for These Common Errors When Residents' Files Are Reviewed

If you have a monitoring review scheduled with a Contract Administrator or a Housing Finance Agency (HFA), you also need to have your residents’ files in order to demonstrate compliance with the low-income housing tax credit program. If an owner does not provide the relevant information in a manner that can be reviewed in a reasonable period of time, the HFA may issue a notice of noncompliance for failure to comply with a compliance monitoring review.

What are some of the common mistakes made by site managers during a review? Below is a partial list of mistakes made by site owners that were found by the Pennsylvania Housing Finance Agency and reported in the fall/winter issue of HUD’s Rental Housing Integrity Improvement Project. They are presented by “finding” category.

Forms—outdated or missing Race and Ethnic Data Reporting forms (HUD 27061-H); incomplete or unsigned Notice and Consent for the Release of Information forms (HUD-9887 and HUD-9887-A); missing Updating Citizenship or Family Summary Form for family members added after move-in; verification forms do no ask appropriate questions and do not have Privacy Act Notice; and reminder notices missing cutoff dates.

Verification—date of birth not documented; household relationship not verified; unsigned verification forms, HUD-50059s, leases; missing third-party verifications; missing the “disposed of assets” question; current balance of checking accounts used instead of six-month average balance of six consecutive bank statements.

HUD-50059s and Leases—forms signed late with no explanation; incorrect codes; gross rent missing; lease terms less than one year; lease changes, including the use of addendums, not HUD-approved.

Move-out—security deposits not returned with 30 days of move-out; no disposition of security letter; move-out dates in file do not match move-out adjustment on HAP voucher.

In addition, the PHFA found HUD-50059s and backup documentation were missing and tenant screening criteria were not consistently applied for all applicants.