LIHTC properties and retention

I have not worked at a LIHTC property but I've managed properties that accept housing vouchers. The Section 8 voucher program doesn't seem much different than conventional multifamily other than the additional inspection and rent check that comes in the mail.

I was speaking to my former portfolio manager recently about the possibility of getting into a tax credit property. She told me it is not possible to get a position at a tax credit property without experience. Having come to the field of property management with no experience, I disagree, but I acknowledge I have no experience on which to base my opinion.

How is managing a tax credit property different than a conventional property or one that accepts housing vouchers?

And since this is the resident retention board; how is retention different on a tax credit property?

I think that your former portfolio manager is not completely correct in response to your inquiry. My LAST position was as assistant manager at a project based LIHTC propertty (this was a NEW development constucted with tax credits for a very specific target market). Up until that point, I HAD NO Tax Credit experience. The employer did pay for me to take some online training with Housing Credit College; which I did at home in my shorts. Because I was actually applying most of what was presented in the coursework at the same time; it helped me to learn the material.

As to your second question about retention at tax credit properties; it is important to remember that you will have another reason that residents will need to leave. That reason is the fact that they need to recertify on an annual basis that they still meet the income restrictions; if they are over income, they will need to leave.

Thanks Johnny! I will look into taking some tax credit classes. I am on Grace Hill, maybe they have some.

I have not seen any coursework for Tax Credit on Graqce Hill; but this is where I got mine (paid for by my previous employer): www.housingcreditcollege.com/

Rose,
I would disagree with the advice that you got.

I find that some of the best Regional Managers and Property Managers come with no experience in LIHTC management. As long as the Management Company has a good handle on the program, and the checks and balance in place, a market rate manager will do fine on the compliance site of LIHTC.

In today market place with 60% rents competing with market rents, we need managers that can sell the value of our apartments. No offense to the affordable managers, but they don’t know how to sell value as good as market rate managers; they have been lucky in the past that they had long waiting list and demand.

There are some great publications and vendors in the industry to learn from. Try and get past copies of the trade newsletters, i.e. Novogradac Journal of Tax Credits. (I will disclose I am an advisor board member for that publication), Elizabeth Mooreland, Spectrum, etc.

Good discussion, and an important one.

Having done both Market and LIHTC, I would agree.... What I will say, is as long as you can demonstrate your attention to detail in the paperwork connected with the compliance aspect; you will do well. Remember, up to my last property; I had NO exposure to Tax Credit.

My last properrty was a BRAND NEW (just finished construction) LIHTC property (80 studio sized units); designed for a very narrow demographic (not only extremely low income, but also disability and chronic homeless; and needed to prove all 3). I did the entire lease up for initial occupancy. Our procedure involved sending all verifications and documents to compliance for review. Compliance finds and identifies errors and sends back for correction (it got to the point that my only errors were typographical errors); once errors were corrected, I would send back to compliance for review and approval. Once compliance approves applicant, we would need to send the file to the owner for final review. The owner would do the same thing, look for errors and send back for correction. Once all errors were resolved, they would approve the applicant for move in. The entire process was lengthy; initially it took almost 8 weeks (which was okay because the inital applications were taken before the property was complete). As we got better and implemented a streamlined process, we got it down to 3, with a record of 14 days.

Tax credit is not what you can be told, it is about what you can PROVE.

My last week there, I submitted the final file to the owner for review that made the property 100% tax credit certified and occupied.

The only headache beyond that is the recertification process; to make sure that the resident is still within income restrictions. This is an area where retention is a challenge, but when a resident no longer qualifies because his income situation improved; you HAVE DONE YOUR JOB!

With Tax Credit properties, you will generally have a waiting list and that will make marketing not as critical as if you were a market property.

Rose,
Managing a tax credit property==paperwork, paperwork, paperwork! I wish I could explain the differences to you however in the past 10+ years tax credit is all I have done.(240 units 100% tax credit) I can however tell you that the attention to detail and the paperwork aspect can be incredibly demanding. I would highly suggest to you the Housing Credit College that Johnny recommended, it has wonderful course materials and you can gain your Site Compliance Specialist Designation. These courses give you all the information you need to know about the program, program rules and the know how to process an application for a tax credit applicant.
Michael, I would have to disagree with you that affordable managers don’t know how to sell as well as market managers. Coming from a community that does not have a waiting list nor do most of our competitors in the tax credit community in our area the aspect of marketing to generate "qualified" traffic requires much more work than the manager just trying to sell the value/features and benefits of that market community (just my opinion)
Johnny--great job leasing up your past community!

It IS amazing how, in a society that is approaching becoming a paperless one, how a 5-8 page application becomes a 100+ page file at move in...... Forgetting how much paper is wasted when errors are made and corrected. Early on, I think I must have gone through at least a ream of paper with EACH resident file, by the time they moved in. I must have killed a small forest!

Fortunately, we had a company come by a couple of times a month and take away all our paper waste.

I use our paper waste to print guest cards, phone logs, property maps, junk fax, etc. on the back side, unless it has some sensitive information on it. Then it gets shredded immediately. Residents or our local shipping store takes the shreds to use again as packaging material.

The company that came for our paper waste, gave us a heavy duty cross cut shredder to use. Even though it was strong enough to go through several stapled pages, I would always cut off the stapled corner anyway. Whenever the shredder failed, we would call them and they would bring a replacement, sometimes the same day. The shredder mechanism would sit on top of a big 50 gallon can. When they came and picked up (whenever we called), they would just switch out the can and we would get a $30 check in the mail for each can picked up.

Even though this was a heavy duty shredder, it was nowhere near as powerful as the one I used when I was in the Army, destroying classified documents. This one would take a case of paper up a conveyor belt,drop it in a hopper and turn it into DUST in about 3 seconds. We used it when we would need to destroy changes to technical manuals.

Wow, those are some awesome shredders! I wish someone would pay us for our shreds! Oh well, at least we recycle them. I just have a small one from office max, but it works great for our usage and it was under a hundred bucks.