Dos & Don'ts

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Reduce the risk of a lawsuit based on an application misunderstanding.

Like other real estate businesses, you may be using ChatGPT, Bard, Bing, and other generative AI products, a.k.a. chatbots, for marketing purposes, such as developing advertising strategies, analyzing housing markets, and generating property listings, ads, social media posts, and other marketing content. Just recognize that for all their potential benefits, chatbots contain flaws that make them risky to use for marketing and advertising.

Make sure you take into account the Section 8 subsidy in determining a Section 8 voucher holder’s ability to pay rent. If your site requires applicants to have a minimum income level, don’t let this policy improperly reject voucher holders who don’t meet your site’s minimum income criteria. You could be violating tax credit rules barring discrimination against those applicants. The IRS forbids owners from refusing to rent to a Section 8 voucher h...

If you have a manager’s unit as part of your original allocation of credits, the manager’s unit is not a considered an LIHTC unit. But it was included in eligible basis, so it’s more akin to common space.

Approving a live-in aide, if needed by a disabled household, is an example of a reasonable accommodation. When considering a household’ request for a live-in aide to accommodate a household member’ disability, don’t be concerned that the aide’s occupancy in a low-income unit will affect the household’s income.

Though you can require that an applicant’s unit be kept clean and free of health hazards, you can’t require that the applicant be physically able to keep the unit in such condition himself. It doesn’t matter whether the applicant himself is physically able to clean or maintain his unit. If the applicant hires or uses another individual or a service to keep the unit clean, the issue becomes whether the unit will meet the standards for your tax credit si...

The HUD Handbook requires you to count household members’ unborn children as part of a low-income household for occupancy and income purposes [Handbook 4350.3, par. 3-6(E)(4)(d)]. You count a pregnant household member as two people, and use the income limits for a larger household size. 

Staff members at tax credit sites can get into trouble when talking with prospects. Any false assurances, improper assumptions, or inappropriate statements could trigger noncompliance and a possible fair housing complaint or lawsuit. To avoid problems, here are three Dos & Don’ts you and your staff should follow when talking to prospects.

When you calculate a household’s income to determine if it’s qualified, total the income of all the household’s members, even if they’re not related. If you make the mistake of counting members’ incomes separately, you’re likely to determine that their household is qualified when it may not be.

Don’t include the value of any approved federal or state rent subsidies the owner gets for a household when you calculate the household’s income and rent. If you do, you may charge the household too much rent. Or you may lose out on renting to a qualified household because you incorrectly determined that it wasn’t qualified.