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HUD Clarification for Properties With HUD and Tax Credit Layering

HUD recently released a memo entitled Occupancy Protections for HUD Assisted Households in Properties with Low Income Housing Tax Credits.

This memo is provided by HUD in response to reports that some owner/agents may be attempting to terminate the tenancy of current HUD-assisted tenants who do not meet LIHTC eligibility guidelines.

The HUD lease details the grounds for termination of tenancy. Reasons to terminate tenancy DO NOT include failure to meet LIHTC requirements. Owner/agents of LIHTC properties sometimes offer incentives-to-move when a family receiving HUD assistance does not qualify for LIHTC. Owner/agents may offer incentives-to-move as long as they are voluntary. Residents must be informed, in writing that they have the option to remain in occupancy in order to ensure that the choice of moving with incentives is truly voluntary. These incentives may not be paid from S8 or FHA project funds.