New Jersey Offers Tax Credit Compliance Monitoring Relief

The New Jersey Housing and Mortgage Finance Agency released Developer Bulletin 2020-11, which outlines the LIHTC compliance monitoring relief, income recertifications and common areas and amenities relief it is offering in response to the COVID-19 pandemic. The relief granted in this bulletin is subject to any superseding guidance issued by the Department of the Treasury or the Internal Revenue Service.

A. Income Recertifications

An Owner of a low-income building is not required to perform income recertifications under § 1.42-5(c)(1)(iii) in the period beginning on April 1, 2020, and ending on December 31, 2020. The Owner must resume the income recertifications as due under § 1.42-5(c)(1)(iii) after December 31, 2020.

Please note that this relief applies only to income Recertifications for the LIHTC program. Other funding sources may have different requirements. Move In and Initial Tenant Income Certifications (TICs) are still required as well as student status verifications.

B. Compliance-Monitoring

For purposes of § 1.42-5, an Agency is not required to conduct compliance-monitoring inspections or reviews in the period beginning on April 1, 2020, and ending on December 31, 2020. The Agency must resume compliance-monitoring inspections or reviews as due under § 1.42-5 after December 31, 2020.

All file audits and physical inspections that were not yet completed in 2020 have been cancelled. Compliance staff is continuing to review annual tax credit compliance submissions for calendar year 2019 and expects that annual compliance letters will be issued before year-end.

Please be advised that this relief only applies to the Agency and does not absolve owners or managers from compliance during this time of suspended audits/ inspections.

C. Common Areas and Amenities

If an amenity or common area in a low-income building or project is temporarily unavailable or closed during some or all of the period from April 1, 2020 to December 31, 2020, in response to the COVID-19 pandemic, and not because of other noncompliance for § 42 purposes, this temporary closure does not result in a reduction of the eligible basis of the building.

Please note this does not apply to laundry facilities and computer rooms; however, limitations for use and social distancing protocols should be in place.