Appendix 1~9.xlsx

Summary

Development Name & Address Owner Entity Since: (Mo/Yr)

Property / Site Manager's Name Since: (Mo/Yr)

Name / Title Date Name / Title Date

Asset Manager / Compliance Analyst Supervisor - Rental Compliance

Development's Description:

Non-IHDA/HUD Subsidies

Term of Subsidy Contract(s)

Addt'l IHDA Program Units

Unit Composition

Additional Addresses

Number and Type of Bldg.

Amenities

Have all findings from prior management/desk/tenant file reviews been resolved? YES

NO

N/A

Comments to Findings/Desk Review Questions:

Questionnaire

Part A: Maintenance and Security

b. Which type of inspection was completed?

c. Capital improvements completed and/or planned for the current year?

1. General Physical Condition A C

I. Maintenance and Security Rating

Superior Above Average Satisfactory

Below Average Unsatisfactory

Part B: Financial Management

2. Accounting and Bookkeeping A C

3. Submission of Reports

1) Annual audited financial statement

Date last report was due / /

Date last report received / /

2) Annual operating budget Date received

3. Submission of Reports A C

4. Budget Management

a. Is an operating budget prepared annually and is it approved by the owner?

4. Budget Management A C

5. Financial Compliance

a. Were there any findings on IHDA financial submission?

20 DCR

20 DCR

20 DCR

Cash $ Accounts receivable $

Accounts payable $

5. Financial Compliance and Condition A C

6. Rent Schedule Compliance

Rent Used Approved/Maximum Rent Rent Used Approved/Maximum Rent

e. Does agent provide a complete package to receive a timely rent increase?

f. Date of last rent adjustment:

h. Are rents at market or rent ceiling?

i. Was the annual utility allowance analysis submitted?

6. Rent Schedule Compliance A C

7. Accounts Receivable / Payable

If no, what is the percentage for: year % year %

d. Are bills paid in sufficient time to avoid late penalties?

7. Accounts Receivable / Payable A C

8. Reserves and Escrows

a. Complete chart below

8. Reserves and Escrows A C

II. Financial Management Rating

Superior Above Average Satisfactory

Below Average Unsatisfactory

Part C: Leasing and Occupancy

a. Does the development have an executed TSP?

Date TSP signed by owner/agent:

Does the development have any unresolved TSP findings?

Date of last approved AFHMP:

2.) was it the appropriate size?

White %

Black/African American %

American Indian/Alaska Native %

Asian %

Native Hawaiian/Pacific Islander %

Other %

Not Hispanic or Latino %

j. What staff positions are/will be responsible for affirmative marketing?

l. How many units are accessible?

If yes, answer question 2.; If no, skip to question 3.

If yes, provide the person's name and telephone number below.

Name:

Telephone Number:

9. Tenant Selection and Orientation A C

10. Vacancy, Turnover and Market Conditions

b. Is the vacancy rate satisfactory and not excessive?

Has the development had significant turnover?

Month Total # of move outs

Year to date ERROR:#DIV/0!

c. Do any of the following factors contribute to vacancy problems?

Security problem Poor maintenance

Noncompetitive amenities Rents too high

Inadequate marketing Location

Development reputation Lack of demand

Bedroom mix/size ( bdrm hard to rent)

Tenant/management relations Other

e. Does the development maintain a wait list of prospective tenants?

Was annual update letter sent to applicants, as required?

Date update letter was sent to applicant

Was wait list purged? When?

How many are currently on wait list?

Is the wait list currently open closed

Does the wait list include all required elements?

Were the applicants selected in proper order from the waiting list?

f. Is surrounding neighborhood market prosperous, average, or depressed?

g. Are surrounding neighborhood conditions improving, stable, or declining?

h. Are the market conditions affecting occupancy?

i. Does development require rent concessions?

j. Is there saturation of affordable housing?

10. Vacancy and Turnover A C

III. Leasing and Occupancy Rating

Superior Above Average Satisfactory

Below Average Unsatisfactory

Part D: Tenant/Management Relations

11. Tenant Satisfaction A C

IV. Tenant/Management Relations Rating

Superior Above Average Satisfactory

Below Average Unsatisfactory

Part E: General Management Practices

a. Does owner/agent have a formal ongoing training program for its staff?

On-site (Frequency )

IREM NCHM HUD seminars Local colleges

Fair Housing training date

Energy conservation

Other

12. Training A C

13. Insurance and Bonding Submit insurance certificate renewals if the insurance will expire within 90 days or less.

a. List current insurance coverage and expiration dates.

Liability $

Umbrella $

Fidelity $

13. Insurance and Bonding A C

Management fee %

14. Management Agreement A C

15. Program Compliance

a. Was the Consolidated Certificate of Compliance received?

When:

HOME only

b. Was the Tenant Profile Compliance Report (form TST-2) received?

When:

Section 8 only

c. Was the Addendum B submitted?

Section 8 only

d. Was the 30% Income Targeting Certification submitted?

15. Program Compliance A C

V. General Management Practices Rating

Superior Above Average Satisfactory

Below Average Unsatisfactory

Part F: File Review

Number of program units Number of files reviewed

Name Unit Name Unit Name Unit

16. Resident File Maintenance

d. Are the files organized and properly maintained?

16. Resident File Maintenance A C

If there was a discrepancy was it resolved?

If a household was ineligible at move in, were exceptions granted?

17. Household Information A C

18. Verification

a. Have all verification items been verified and properly documented?

18. Verification A C

19. Leases

a. Were the correct model leases used?

b. Were the leases signed and dated by all parties?

c. Were all applicable addendums/attachments added to the lease?

d. Was security deposits collected in the correct amount for the program type?

e. Were pet deposits, if applicable, charged correctly per pet policy?

19. Leases A C

20. Certification/Recertification Activities A C

21. Move-Out File Review

a. Did the move-out files include the required documentation?

21. Move-Out File Review A C

22. Applicant Rejection Review

a. Did the applicant rejection letter include the required criteria?

b. If appealed, were criteria met?

22. Applicant Rejection Review A C

VI. File Review Rating

Superior Above Average Satisfactory

Below Average Unsatisfactory Not Rated

Attachment A

Issue/Complaint Status

Instructions

Development name & address: include addresses for all buildings. Use summary page under Development Description if necessary for additional addresses.

If this is a scattered site, for example, use one address on the first page and list the remaining addresses in Development Description.

Owner entity: review management agreement, regulatory agreement, or audit. Use legal entity name.

Type of program: list all program types in senior loan position - i.e. HOME, Section 8 and/or Tax Credits. IHDA programs only - do not use abbreviations. Do not include LTOS, SRN or 811 here, as Rental Compliance does not monitor these programs. They are captured under Additional IHDA Program Units in the Development Description.

IHDA number: list all loan numbers by lien position (i.e. 17-2037-01), and IHDA TC number (federal & state). Use the Benedict numbering system, not the portfolio system.

Number of Program units: list the number of units for the highest IHDA loan position only

Date of last annual inspection/desk review/tenant file audit: insert the date of the most recent on-site management review. This does NOT include the physical inspections. These inspections are addressed in part A.

Transferred to AM: omit MLs. Obtain from DMS, Project Dates.

Maturity date: obtain from Benedict.

Year of construction: insert year built. Refer to project summary. If construction year is not indicated, ask owner/agent.

Name / Title: type the name of the person who completed the review. Adjust the title.

Review Approved By: the approving Rental Compliance Supervisor will insert their digital signature into the PDF version of the final report.

Name / Title: type the name of the Rental Compliance Supervisor.

Indicate term of any subsidy contract, including expiration date. For those developments where IHDA is not the Contract Administrator, obtain HAP contract info and indicate ending date. Also, identify the contract term. If not indicated, review the notes in the audit for this information.

Additional IHDA program units: list programs not identified above. (i.e. 10 SRN units / 8 one BR and 2 two BR)

Additional addresses: List each building address in the development. Stating development is scattered sites is not acceptable.

Amenities: Review project summary and compare with what the development offers. Make it a finding if amenities do not match.

Work out & additional comments: refinance, loan modification, transfer of physical assets, Owner or Agent changes, market changes. Review current Loan Monitoring Agenda.

Have all findings from prior reviews been resolved: List any outstanding/unresolved findings from the prior review (limited to the prior year). If there are outstanding findings, include specific findings. Unresolved code violations, audits, TSP and AMP updates, budgets, or tenant file audits, will result in an automatic Below Average or Unsatisfactory based on the number of findings.

2. Create a “general finding” definition for each common finding throughout your file audit. List all general findings first. The definitions are to be separate and used as a reference for the O/A on your MOR report. Example: General Finding A: 5 out of 10 files were missing income verifications; General Finding B: most files were using incorrect rent/income limits.

Finding a: The file does not contain the credit check, criminal background check, or sex offender screening for adult household member Dante, as required by the Tenant Selection Plan. Management must either complete all screening as indicated in the TSP, or revise the TSP to reflect actual practices in place. In response, certify that a credit check, criminal background, and sex offender screening will be obtain for all future adult applicants and retained in the tenant file.

Check for pass/fail for the most recent physical inspection. Inspection date, type, and results can be reviewed in DMS under Monitoring > Project Monitoring > Program Inspection. Copies of the inspections, if needed, can be found in T:\Asset\Portfolio\Applicable Year\Inspection. If there has not been an inspection for the current year, review prior years and enter the most recent inspection date. If development failed their inspection verify current status with field inspector.

c. List the liability from the rent roll or security deposit report, and the balance from the security deposit escrow account in the remarks column. If account balance does not equal or exceed liability, explain how deficit will be funded.

d. Properties in Chicago must pay interest if the deposit has been held for 6 or more months (See Chicago Residential Landlord Tenant Ordinance).

Per state law (765 ILCS 715), interest must be paid out when it accrues to $5 or at move-out, whichever is sooner. Not required to pay if property is a public housing (excluding Mod Rehab projects), if there are less than 25 units, or if the parcels are not contiguous.

Contiguous means: adjacent, physically touching or adjoining without intervening parcels or pieces of property. If they are across the street, are separated by property with a different owner or are in different geographic areas they are not contiguous. If they are not contiguous, a determination regarding interest should be made by looking at each separate parcel by itself or by looking at one contiguous set of parcels separately from other non-contiguous parcel(s). If one parcel has 25+ units, interest is required. If any single parcel has less than 25 units, but together with other contiguous parcel(s) totals 25 or more, interest is required. If one non-contiguous parcel has 25+ units but the other(s) do not, only the parcel with 25+ must comply.

Evidence of security deposit interest refunds includes a printout from the General Ledger, the tenant ledger reflecting interest credited, a letter in the tenant file acknowledging receipt of a cash interest payment, a move-out reconciliation statement, etc.

If audit is not received by deadline, FPA team will send a delinquency letter and, if necessary, a non-compliance letter. Look for any follow-up letters in the Portfolio, Audit folder. DMS will also be noted with notice dates.

a2. All budgets are due by October 1. If the Budget is not submitted on time, regardless of an extension request (enter extension expiration date in the remarks column), check no and make a comment regarding due dates. If the Budget has not been received, check no and make it a finding.

If budget is not received by deadline, FPA team will send a delinquency letter and, if necessary, a non-compliance letter. Look for any follow-up letters in the Portfolio, Budget folder. DMS will also be noted with notice dates.

b. For each of the last 3 years, enter the Debt Coverage Ratio (DCR). Obtain in DMS from Monitoring -> Project Monitoring -> AL_Audit. If the most recent year's audit has not been received/reviewed & the DCR determined, use the three most recent know years.

Example: When completing the 2022 review, enter the DCR for 2019-2021. If the DCR for 2021 has not been determined or the audit has not been received yet, enter the DCR for 2018-2020 and indicate in the comments that the 2021 audit is under review, or has not been received, as applicable.

c. Review most recent month end Balance Sheet. In general, the balance sheet should be no more than one month old. However, you may accept the month prior, if management's accounting department has not completed their month end processing.

If the balance sheet is not received, make a finding.

The balance sheet should be completed as follows:

Cash = cash - operations

Accounts receivable = Tenant Accounts Receivable + Accounts Receivable HUD (do not include allowance for doubtful accounts). Make a comment that Accounts Receivable includes Accounts Receivable-HUD and Tenant Accounts Receivable.

Accounts payable = Accounts Payable Operations

See sample:

b. Compare development's current rents to most recent Max Rent Schedule, in Portfolio/Rent Schedule. If there is not a current rent schedule saved to the portfolio ask the Compliance Analyst.

For both a & b, utilize the Most Restrictive Rent Worksheets (when there are multiple IHDA programs), to determine allowable rents. Compare the rental charges and identify discrepancies between the rents charged, the approved rent schedule, and the Most Restrictive Worksheet in the table. Make it a finding.

If a rent increase was submitted timely (120 days prior to the effective date), and the new rents were implemented without an approved IHDA rent schedule, this will not be a finding, due to IHDA's delay.

c. The development is not required to submit a rent increase request annually, so answering "no" is not automatically a finding. However, if the development implemented new rents without IHDA approval, this would be a finding.

d. For Section 8, NHTF and HOME see DMS. For Other Programs use effective date of Owner's rent schedule.

b. Percentage (%) = "Bad debt" / ("Total Rental Income" OR "Net Rental Income" + "Vacancy Loss"). Enter the year and amounts information on the far right side of this question to do the calculation of the %. The information can be taken from a DCR calculation or directly from the audit.

c. Must use Aged Payables listing. Please list amount only. If aged payable is greater than 60 days owner/agent must explain plans for reducing outstanding payables. If delinquency is for management fees due, this is not a finding.

d. If there are aged delinquencies, ask if any late fees have been charged. If Owner is delinquent with IHDA's debt service, then this would be checked No and is a finding.

b/c. If no, make a finding only if the development has not been paying into reserves or has submitted many withdrawal requests that ultimately reduced the $1,500 per unit (minimum requirement). Make a comment/recommendation if funding levels do not appear adequate. Review Benedict/transaction history and filter to view development's activities for last 2 years. Review Portfolio/Escrow & Reserve Analysis for any forbearance letters. If this is a development with newly established reserves, make a comment: continue funding as required.

If the property is using the IHDA TSP, the initial plan must be signed by IHDA, the owner, and agent. Subsequent plans must be signed by the owner and agent.

If the property is using a TSP reviewed by HUD, the HUD approval memo/letter must be attached. The TSP must be signed by the owner and agent.

If the property is not using the IHDA TSP, the IHDA approval memo must be attached. The TSP must be signed by the owner and agent. You may see this with new deals that are Housing Authorities, RAD deals, 811 deals, etc.

b. List date AMP was approved. If plan is expired and no new plan has been submitted to IHDA or HUD, this is a finding. If the AMP was submitted to HUD and it has not been approved, it is a finding if the plan is expired.

If the waiting list is managed by another agency, such as a housing authority, and 100% of applicants must come from that waiting list, mark N/A and make a comment in the remarks column indicating why outreach was not completed.

If less than 100% of units must be referred from another agency (such as SRN units), the agent must maintain a list & perform outreach for those units that do not require referral.

e. A development that provides affordable housing should keep track of race and ethnicity in their development. HOME, Section 8, NHTF, and Tax Credit deals have to do the tracking to comply with HUD. Racial mix must equal 100%. Ethnic mix must equal 100%.

f. Detail the least likely to apply groups from the current approved AMP in the remarks section.

g. Add in remarks the successful outreach efforts such as local exhibits or other additional outreach efforts.

l. Review Management Plan, or TSP. An Accessible Dwelling Unit is a unit that is approached, entered, and used by physically-challenged people.

Accessible features include: Wide doors, sufficient floor space for wheelchairs, lower countertops, lever and loop type handles hardware, seats at bathing fixtures, grab bars in bathroom, knee spaces under sinks and counters, etc. Most accessible features are permanently fixed in place.

An adaptable dwelling unit is one constructed and equipped so it can be converted with minimal structural change for the use by persons with different types and degrees of environmental limitation.

Adaptable features include: An Adaptable unit has features that are either adjustable or capable of being easily and immediately added or removed to "adapt" the unit to individual needs or preferences.

b. Formula - Total # of move outs divided by total units. If turnover rate is greater than 30% this will be a finding unless the rate is normal for this tenant population or program requirements (i.e. SLF & SRO properties). If this is typical for the tenant population, explain in the remarks column. If current occupancy is 90% or greater this will not be a finding.

f./g. Determination of neighborhood market conditions should be made through the site staff's and through conversations with the asset manager & physical inspector, if necessary. If conditions are other than stable/improving, explain how.

h. Market conditions that negatively affect the property should be indicated, i.e. job loss, college town, economic depression, location, etc.

If there are concessions, please list them.

j. If there is a saturation of affordable housing, explain how, i.e. two new senior developments are being constructed in the immediate area with more amenities, etc.

For Fair Housing, all properties must attend Fair Housing training. This should include office and maintenance staff. Recommendation is every 2-3 years.

Based on observations and conversation with staff during the review, make a finding or comment as necessary if extra training is needed for HOME, tax credits, etc.

Fidelity is required if development has a loan with IHDA and/or IHDA is a party to the management agreement. Fidelity is not required if the property is owner-managed, is pure LIHTC, or is a Contract Administration only property. Basic Coverage Amount for fidelity should be N/A. Check that fidelity amount covers at least three months of Gross Potential Income (GPI).

Delete the comment regarding renewals if not applicable (i.e. if the policy will expire in more than 90 days).

The management agreement in force must be for the current agent. This is a finding if the agreement reflects a former agent.

c. Answer question. Addendum B, pages 3-5, should be saved in Portfolio/Year/Correspondence. The Addendum B, pages 2 and 9-12, must be completed by IHDA, combined with the owner's pages, and submitted to HUD with the desk review report.

d. Answer question. Income targeting report should be saved in Portfolio/Year/Correspondence. An income targeting report generated from the owner's software is acceptable in lieu of the IHDA form.

e. Review occupancy & wait list reports due for the most recent quarter. Reports can be found at T:\Occupancy & Waitlist Survey\Year# Q#. Make a comment if not submitted.

If the random selection does not include a move-in, request a file replacement from the rent roll. The selection should also include a move-out and rejection file.

b. HOME requirement: Individual tenant income, rent, and inspection information must be kept for the most recent five year period through the affordability period and five years after it has concluded. (From HOME Guide for Owners, paragraph 3.7, p83)

Tax Credit requirement: Federal LIHTC regulations require that Owners retain records for each building in the project for at least 6 years after the due date (with extensions) for filing the federal income tax return for that year. The records for the first year of the credit period, however, must be retained for at least 6 years beyond the due date (with extensions) for filing the federal income tax return for the last year of the compliance period of the building. (From 8823 Guide, 2011 revision)

Section 8 & 236 requirement: duration of tenancy plus three years.

Ask how the owner is disposing of records. Are they being shredded, burned, etc.?

b. Applications must be date and time stamped upon receipt. Application should ask for household composition, age, student status, sources of income and assets, assets disposed of for less than fair market value.

c. Refer to the TSP (section V) to determine which screening management has indicated. Make a finding if the file does not contain documentation of the indicated screening.

d. Section 8 must use the HUD Racial and Ethnic data form (27061-H).

e. Applicable for properties built prior to 1978 and elderly properties built prior to 1978 that house children under the age of six.

f. Refer to the occupancy standards in the TSP.

b. EIV income reports (and income discrepancy reports, if applicable), must be used at all annual and interim recertifications. For move-ins, the income report must be obtained within 120 days of transmitting the move-in to PIC (PIH Information Center) and compared to the information provided on the application. Missing reports are a finding.

Any income discrepancies must be resolved within 60 days of the EIV income report date. If the file does not contain documentation showing that the discrepancy has been investigated and resolved (valid, certifications corrected; or invalid, file documented to show why), this is a finding.

d. Section 8 projects are required to collect security deposits. The deposit is the greater of one month's total tenant payment or $50.

For other programs, the security deposit requirements, if any, vary. Discuss with the property to determine their deposit policy. Review the policy & compare to actual practice in place.

If a third party has paid the deposit on behalf of the tenant, the deposit amount must still be listed on the lease.

Include in Remarks section if rents exceed maximum rent level, missing or incorrect information on 50058 or TST-3 (TIC) forms.

Section 8 must complete a full recertification at least annually, effective on the first day of the month of move-in.

HOME projects must complete a full recertification with source documentation every six years of the affordability period. Self-certification may be acceptable for the certification years between.

100% LIHTC projects are not required to complete an annual recertification, unless combined with another program that has recertification requirements (i.e. Section 8). The recertification is for the applicable program, not for LIHTC. Student screening must still be completed every year.

Less than 100% LIHTC projects must complete a recertification annually,…