D. Back in Compliance

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• (1) corrected noncompliance may include a copy of the full recertification, including application, verifications, and/or tenant income recertification. Owners must submit copies of the documents required by the monitoring agency.

  • A recertification can be performed using current income and asset sources and current income limits. If there is no resulting noncompliance (e.g., violation of the Available Unit Rule), the unit would be out of compliance on the date the recertification was due and back in compliance on the date the tenant signs the recertification.

  • A retroactive recertification can be performed which completely and clearly documents the sources of income and assets that were in place at the time the recertification should have been completed and applies income limits that were in effect on that date. If there is no resulting noncompliance (e.g., violation of the Available Unit Rule), the unit would be out of compliance on the date the recertification was due, and back in compliance on the date the tenant signs the recertification.

  • While the recertification has been performed retroactively, the recertification documents should be dated with the current date. All the adult members of the household should sign the recertification using the current date. In other words, the recertification documents should not be backdated.

• The advantage of the retroactive recertification is that the owner may avoid violating the Available Unit Rule.

• (2) In either case, the effective date for recertification continues to be the anniversary of the actual date of move in.

• (3) Example 1: New Recertification is Performed After Notification

  • An owner failed to complete a tenant’s annual income recertification, which was due February 10, 2009. The mistake was identified during a state agency compliance review conducted November 1, 2009. The management company completed the recertification on November 12, 2009, using the income limits available on that date. The recertification was completed based on the tenant’s anticipated future income for the period November 12, 2009, through November 12, 2010.

  • The unit is out of compliance from February 10th to November 12th, 2009. Since the late income recertification was completed within 120 days of the annual income recertification due February 10, 2010, and is based on current income limits and the tenant’s anticipated income for the next year, the income recertification satisfies the annual income recertification requirement for 2010. Since the noncompliance was corrected after notification of a state agency review, the noncompliance must be reported on Form 8823.

• (4) Example 2: Household Determined to be Over-Income

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• An owner failed to complete a tenant’s annual income recertification, which was due February 10, 2009. The mistake was identified during a state agency compliance review conducted November 1, 2009. The management company completed the recertification on November 12, 2009, using the income limits available on that date. The recertification was completed based on the tenant’s anticipated future income for the period November 12, 2009, through November 12, 2010. The household’s income was determined to be more than 140% of the income limit.

• Since the recertification was corrected after notification of a state agency review, the noncompliance must be reported on Form 8823. The unit is out of compliance with the recertification requirements from February 10th to November 12th, 2009. Since the late income recertification was completed within 120 days of the annual income recertification due February 10, 2010, and is based on current income limits and the tenant’s anticipated income for the next year, the income recertification satisfies the annual income recertification requirement for 2010. Further, the Available Unit Rule may have been violated if any comparable (or smaller) unit was rented to a nonqualified household or as a market rate unit after February10, 2009, and before November 12, 2009.