LIHTC, PFC and HFC Audit
The Low-Income Housing Tax Credit, PFC and HFC audit is a compliance review process required for properties that benefit from the LIHTC program, a federal incentive designed to encourage the development of affordable rental housing for low-income households.
Why LIHTC, PFC and HFC Audits Matter
An LIHTC, PFC and HFC audit ensures compliance with federal regulations, preventing penalties such as the recapture of tax credits. By adhering to these requirements, property managers maintain the program's integrity and continue to provide affordable housing to qualifying households.
Tenant Income Verification:
Review of tenant income documentation, such as W-2 forms, pay stubs, and bank statements, to ensure compliance with income limits based on area median income (AMI) as defined by HUD.
Verification of annual recertifications for continued tenant eligibility.
Rent Compliance:
Cross-checking rental amounts to ensure they do not exceed the maximum limits set by HUD for the respective income tiers (e.g., 50% or 60% AMI).
Unit Allocation:
Ensuring the required percentage of units are designated and occupied by qualified low-income tenants.
Lease Agreement Review:
Checking lease agreements for compliance with program requirements, including proper disclosures and terms.
Documentation and Record-Keeping:
Evaluating the property manager's record-keeping practices to confirm all required tenant and property information is properly documented and retained.
Physical Inspection:
Assessment of the property's physical condition to ensure it meets safety and habitability standards.