Finding Text
Finding No. 2022-004
HUD Low Income Housing Preservation and Resident Homeownership Act of 1990
Federal Assistance Listing Number #99.999
Uniform Guidance Compliance Requirement Code: E-Eligibility
Criteria
Tenant lease files are required to be maintained and tenant eligibility determined in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs.
Condition
Our testing procedures noted that the owner did not perform certifications and recertifications timely, did not maintain tenant files in compliance with HUD Rules in Code of Federal Regulations at 24 CFR Part 92, and did not select tenants from the waitlist appropriately.
Cause
Management's policies with respect to the determination of eligibility and the maintenance of tenant lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs were not consistently followed.
Effect or Potential Effect
The procedures for determining tenant eligibility and maintaining tenant lease files were not consistently applied in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. This could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD.
Questioned Costs: Not applicable.
Context
The procedures applied to our lease file review revealed the following:
o One of two recertifications tested and one of one initial certifications tested were not performed timely.
o Management was unable to provide one Affordable Housing Marketing Plan for the two properties tested.
o Three of three tenant file Electronic Income Verifications (“EIVs”) tested were either run late or not done during 2022.
o For two of two tenant files tested found that the tenant payments per recertifications did not agree to the rent rolls.
o Move-in inspection was not provided for one of one new tenant file tested.
o One new tenant of one tested did not appear on the waitlist.
o One of one move-out inspections tested were not provided.
Repeat Finding: Yes - Finding 2021-006
Recommendation
Management should put procedures in place and provide additional training to compliance personnel to ensure consistent application and adherence to the requirements in accordance with the requirements of HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs.
Views of Responsible Officials
Management has policies and procedures in place, compliance has been impacted by being understaffed while recovering from covid-related social distancing/limited on site presence. This resulted in recertification and move-in compliance issues. Compliance team and the new HUD Portfolio Manager have been providing trainings for the HUD managers in 2023 and will continue to do so in 2024. In 2022 and 2023, Compliance Manager ensured that all staff who needed access to EIV took the appropriate steps (Cyber Awareness Training, updated EIV authorizations) to access EIV for their properties to run the reports timely. In 2023, The HUD Portfolio Manager created an EIV workflow training for the HUD managers. Both the Compliance team and HUD managers were present. One Compliance Specialist with HUD experience has been filling in and assisting at the HUD properties where we continue to be understaffed. As a Below Market Interest Rate (“BMIR”), we do not receive HUD subsidy or oversight from HUD. Because both properties are due for Affirmative Fair Housing Marketing Plan (“AFHMP”) updates, we will submit an updated plan to HUD for review and approval in 2024. Management is aware and has been performing Move-out inspections with tenants whenever possible.