Indiana Housing & Community Development Authority recently released Notice RED-18-20, which states that bond developments must still meet the 20/50 or 4/60 minimum set-aside as Section 142 was not amended to include the income averaging provision. However, due to the 4% credit, projects may still elect income averaging so long as they still meet the 20/50 or 40/60 test as well in order to satisfy bond compliance.
4%/bond developments which have received an allocation but have not yet submitted a final application may request a modification in order to adopt income averaging. Modifications cannot be given to projects which have already been issued an 8609.
To request a modification, the owner must submit the following information to Peter Nelson, IHCDA’s Rental Housing Tax Credit Specialist (pnelson@ihcda.in.gov):
- IHCDA’s Income Averaging Minimum Set-Aside Request Form (posted below this RED Notice).
- Updated pages of Form A, including but not limited to pages reflecting minimum setaside election, unit mix, rents charged, and the proforma
- Update from the market analyst confirming that they have reviewed the proposed changes in income targeting and rents charged and that the changes will not negatively impact market demand
- Per QAP policy on modifications, a modification fee of $1000 plus an additional fee of $1500 if the recorded lien must be amended and re-recorded
- Owner must work with IHCDA to amend the extended use agreement (Lien and Restrictive Covenant Agreement) if already recorded. The lien must reflect updated income and rent restrictions applicable to the project.
Questions Questions about this policy can be directed to Peter Nelson (pnelson@ihcda.in.gov), Alan Rakowski (arakowski@ihcda.in.gov), or Matt Rayburn (mrayburn@ihcda.in.gov).
