1. (a)

   1. (1) When all the income and asset verifications have been received, the owner/manager must:

      1. (A) Record and compute the twelve-month anticipated income and income from assets of adult occupants; and
      2. (B) Reconcile to amounts on the verifications.
   2. (2) If the total twelve-month projected income is less than or equal to the maximum allowable qualifying income in effect at the time of tenant certification, the household is income-eligible for a tax credit unit.
   3. (3) If the household income exceeds the maximum allowable qualifying income, the household cannot be certified eligible for a tax credit unit.
   4. (4) If it is determined that all requirements for eligibility are met, the Certification of Tenant Eligibility must be completed and executed along with the lease prior to move-in.
   5. (5) All adults (age eighteen (18) or older at time of move-in) must sign the lease and TIC prior to move-in.

2. (b)

   1. (1) The Tenant Income Certification must be completed in ink or by computer.
   2. (2) The Arkansas Development Finance Authority will not accept strikethrough lines or the use of white out on the TIC.
   3. (3) If errors are discovered before all parties sign, a new TIC must be prepared.

   4. (4)

      1. (A) If errors are discovered after all parties have signed, the authority will accept a properly executed addendum with corrections or a new TIC.
      2. (B) You may:

3. (i) Use the regular TIC form;

   1. (ii) Identify it as the addendum; and

      1. (iii) Complete only the areas that are being corrected.

      2. (C) Attach the signed addendum to the TIC.

         1. (c) The effective date of the LIHTC Tenant Income Certification.
   2. (1) I.R.C. § 42 specifies that the LIHTC TIC is effective on the date the unit is designated as a low-income unit, i.e., the date a qualified household occupies the unit.

   3. (2) For example, John and Jane Doe completed a rental application on April 12, 2004. The property manager determined the household to be eligible on April 21, 2004. John and Jane Doe signed the rental lease on April 25 and took possession of the unit on May 1, 2004. The effective date of the LIHTC certification is May 1, 2004. All subsequent recertifications must be performed within one hundred twenty (120) days of May 1 of each subsequent year of the compliance period.

      1. (d)
   4. (1) Managers must be aware of the tax credit effective date and be sure to recertify within one hundred twenty (120) days of the anniversary of the tax credit certification date.
   5. (2) Do not move the effective date forward to accommodate other programs.
   6. (3) If signatures are obtained in advance of the effective date, managers are responsible for determining that the information is true and correct.
   7. (4) Please refer to 15 CAR § 86-410 on recertifications for additional information.
   8. (5) See policy pertaining to United States Department of Agriculture Rural Development properties.

4. (e) Arkansas Development Finance Authority acceptance of United States Department of Agriculture Rural Development certifications and recertifications.

   1. (1) The purpose of this policy is to eliminate duplication of the Rural Housing Service and low-income housing tax credit (LIHTC) requirements as defined under Treas. Reg. § 1.42-5(c)(4), as it pertains to Tenant Income Certification and annual recertifications.

   2. (2)

      1. (A) Under Treas. Reg. § 1.42-5(c)(4), a state agency, the authority, may exempt buildings financed by the Rural Housing Service under the Section 515 program from the annual income recertification as part of its certification and review provisions.
      2. (B) The state agency (the authority) may assume the accuracy of the information provided without further verification.

   3. (3)

      1. (A) Under this exception, owners are not required to perform annual income recertifications specific to I.R.C. § 42 and the state agencies are not required to review:

         1. (i) Tenant income recertifications;
         2. (ii) Supporting documentation; and
         3. (iii) Rent records.

      2. (B) The state agency must:

         1. (i) Review the information provided by the Rural Housing Service; and
         2. (ii) Determine whether the owner is in compliance with the income limitations and rent restrictions in I.R.C. § 42(g)(1) and (2).
      3. (C) However, student status must be documented at least annually via the authority-approved Student Status Affidavit.
      4. (D) If the information provided by the Rural Housing Service is not sufficient for the state agency to make a determination, the state agency must request the necessary additional income or rent information from the owner of the buildings.

   4. (4)

      1. (A) The Rural Housing Service recertifications will be accepted only after the initial Arkansas Development Finance Authority Tenant Income Certification has been completed.
      2. (B) The next recertification after move-in can be completed utilizing the Rural Housing Service TIC and recertification process.
      3. (C) The authority will allow an adjustment of the effective date to coincide with the Rural Housing Service effective date.

   5. (5)

      1. (A) The authority’s web-based tenant software must be updated at a minimum:

         1. (i) Annually to reflect the annual recertification was completed; and
         2. (ii) Within twelve (12) months from the last recertification.
      2. (B) Due to the fact the Rural Housing Service processes interims it will be up to the owner/management company to decide how they want to upload tenant data to maintain compliance with the LIHTC annual recertification dates.
      3. (C) The authority will accept all interims or an annual recertification that is within the required time frame for the LIHTC program requirements.

   6. (6) Note.

      1. (A) The Rural Housing Service determines tenant eligibility based on its definition of "adjusted annual income", rather than "annual income" as defined under the Section 8 program.

      2. (B) Therefore, the state agency may:

         1. (i) Be required to calculate the tenant's income for I.R.C. § 42 purposes; and
         2. (ii) Need to request additional income information from the owner.

Codification Notes: "Section 8" refers to Section 8 of the Housing Act of 1937 and is codified at 42 U.S.C. § 1437f.