1. (a)

   1. (1) Applicants shall comply with all applicable federal, state, and local laws, including, but not limited to, I.R.C. § 42.
   2. (2) The Arkansas Development Finance Authority’s Compliance Monitoring Policies and Procedures Manual for the Low-Income Housing Tax Credit Program, 15 CAR pt. 86, may be obtained from the authority’s office, and may also be accessed at the authority’s website, https://adfa.arkansas.gov/.
   3. (3) Fair housing manuals may be obtained from the United States Department of Housing and Urban Development’s Little Rock office, and the Fair Housing Accessibility Guidelines may be accessed at the United States Department of Housing and Urban Development’s website, www.hud.gov.

2. (b)

   1. (1) The owner will be required to prepare and submit to the authority, no later than February 1 of each year following the first taxable year of the owner’s credit period, an Owner’s Certificate of Continuing Program Compliance, which, among other certifications, certifies that for the preceding twelve-month period:

      1. (A) No tenants in low-income units were evicted or had their tenancies terminated other than for good cause; and
      2. (B) No tenants had an increase in the gross rent with respect to a low-income unit other than as permitted under I.R.C. § 42.
   2. (2) The owner will also be required to prepare and submit to the authority, no later than February 1 of each year following the first taxable year of the owner’s credit period, the LIHTC Compliance Monitoring Status Report.
   3. (3) Both the Certificate of Continuing Program Compliance and the LIHTC Status Report shall be submitted under penalty of perjury to the authority in accordance with Internal Revenue Service procedures for monitoring compliance.
   4. (4) The compliance monitoring procedures apply to all buildings placed in service in Arkansas that have received an allocation of housing credits as determined by I.R.C. § 42.
   5. (5) Regular site inspections to monitor compliance with habitability standards, according to the Uniform Physical Conditions Standards established by the United States Department of Housing and Urban Development and the authority’s design standards, will be carried out by the authority at least once every three (3) years.

3. (c)

   1. (1)

      1. (A) In the event the authority becomes aware of noncompliance or upon the failure to submit a Certificate of Continuing Program Compliance, the authority will notify the owner of the areas of noncompliance and the required timeframe to correct the deficiencies.
      2. (B) There is a maximum of sixty (60) days to correct such noncompliance.
   2. (2) Additionally, the authority will notify the Internal Revenue Service, as required, of any noncompliance or failure to certify no later than forty-five (45) days after the end of the allowed time for correction.

4. (d)

   1. (1) Frequent or consistent noncompliance of the applicant or any member of the development team in regard to the operation of any development may result in points reduction in the scoring of applications and/or suspension of the applicant or development team member from applying for tax credits for a set term of time and/or compliance with conditions set forth by the authority.
   2. (2) Frequent or consistent noncompliance shall be determined in the sole discretion of the authority and will include but not be limited to reports from the authority’s Compliance Department and Internal Revenue Service Form 8823.

Codification Notes: “LIHTC” means low-income housing tax credit.