Affordable Housing

Our affordable housing team has extensive experience in providing audit, review, and compilation services to a wide range of entities. We have substantial expertise in performing audits following HUD, RD, and various state housing finance agency reporting requirements. Thorough financial audits, reviews, and compilations ensure your statements meet investor, funding source, and state housing finance agency standards. Many of our clients are nonprofit developers, so we perform numerous single audits on an annual basis as well.

We have extensive experience in preparing IRS Forms 1065 and forms PA-65 for affordable housing partnerships. We understand the IRS Form 8609 and can assist in calculating first-year credits. Our affordable housing tax team has the expertise to deal with issues such as transfers of interest, section 754 step-ups, as well as all of the various elections needed for first-year partnership tax preparation. We are available for support for any IRS issues that may arise, as well as to consult on various technical issues.

Passing the 10% Test is a critical milestone for all entities that have received an award of low-income housing tax credits. In order to meet the 10% Test for low-income housing tax credits, a development must incur 10% of its reasonably expected basis by the date prescribed by their state’s tax credit allocating entity. Internal Revenue Service and state housing finance agency regulations require specialized knowledge when preparing a 10% Test. This test is critical in the tax credit process, and it is important to work with someone who has the experience and expertise to ensure that your test is accurate, and your credits are not lost. The M&A Team has the audit and tax expertise, and experience needed to complete an accurate 10% Test.

The 50% test is specific to tax-exempt bond financing. If the development is expected to be financed with at least half (50%) tax-exempt bonds and all units will be qualified low-income, the development may qualify for and receive a 4% low-income housing tax credit allocation without competing in the state’s low-income housing tax credit funding round. To satisfy this test, 50% or more of the tax-exempt bond proceeds must be used to finance the aggregate basis of the building and the land on which the building is situated. This test is critical, and it is important to work with someone who has the experience and expertise to ensure that your test is accurate. The M&A team has the audit and tax expertise, and experience needed to complete an accurate 50% Test.

A cost certification is necessary to establish an eligible basis by the state’s tax credit allocating agency as required by the Internal Revenue Service. The cost certification is required for the IRS Form 8609 to be issued, which allows the owner to claim the L IRS and state housing finance agency regulations require specialized knowledge when preparing a development cost certification. During this critical time in the tax credit process, it is important to work with someone who has the experience and expertise to ensure that you receive the maximum credits possible.

Many syndicators require certification of meeting various benchmarks before releasing equity contributions. McKonly & Asbury has the experience and capacity needed to prepare the required certifications effectively and efficiently to ensure that you receive your equity contributions as quickly as possible after you have achieved the limited partner’s required benchmark.

In partnership with M&L Compliance Management, we can continuously monitor tenant eligibility and compliance with income and rent limits. This includes assisting in submitting annual compliance reports to appropriate funding agencies and providing consulting or training on a variety of compliance topics.