HUD Issues memo regarding occupancy protections for households in properties layered with HUD subsidy and Low-Income Housing Tax Credits

On January 12, 2015, HUD issued a memo titled “Occupancy Protections for HUD-Assisted Household in Properties with Low-Income Housing Tax Credits”. The memo provides owners of HUD-assisted properties with layered Low Income Tax Credits important clarification as to when they can terminate the tenancy of current HUD-assisted tenants who do not meet LIHTC eligibility guidelines. Eviction of HUD-assisted households is limited to those reasons permitted by HUD and state and local law, and detailed in the lease agreement.

As HUD’s subsidized housing inventory continues to age, more owners are being awarded tax credits to fund substantial rehabilitation and repair for these properties. Following rehabilitation, these owners are tasked with ensuring the HUD-assisted households moving back into the new units are also tax credit eligible. In some cases, the HUD-assisted households may have income in excess of the LIHTC eligibility levels. The memo offers clarification regarding the options owners have to offer incentives for these households to move voluntarily.

The memo also reiterates the owner’s rights to terminate tenancy due to criminal activity and reminds owners that eviction is generally only permitted if the criminal activity occurred during the term of the lease or if the owner is able to document that the applicant fraudulently did not disclose the criminal activity during the application process.

Click here to read the full memo.