Effective collaboration between Housing Finance Agencies (HFAs), Low-Income Housing Tax Credit (LIHTC) property managers, and community-based organizations is crucial in ensuring that housing opportunities reach those who need them most. While HFAs oversee LIHTC properties at a high level, nonprofits are deeply engaged with tenant populations, such as veterans, single mothers, or individuals with disabilities. However, communication between these entities often falls short, creating significant challenges in tenant prioritization and placement.

The Communication Disconnect

HFAs are responsible for administering the overall waitlist for LIHTC properties, ensuring compliance with tax credit requirements, and managing property oversight. Nonprofits, on the other hand, are more directly involved with tenants, advocating for their needs and ensuring that vulnerable groups receive the attention and housing they require.

However, when units become available, the owner/agent typically reaches out to the next person on the waitlist without directly informing the nonprofit organizations that could advocate for prioritized tenants. This leads to misplacement of tenants—someone with lower priority on the waitlist may be placed in a unit that was meant for a more vulnerable population, such as a single mother or a veteran.

A study done by the Urban Institute highlights how this breakdown in communication impacts the efficiency of affordable housing programs and exacerbates the difficulties faced by specialized tenant groups.

Consequences of Poor Communication

The absence of timely and effective communication has serious consequences for both tenants and the organizations supporting them. This lack of communication can result in misaligned placements with tenants who are less suited for specialized units being placed in them, undermining the intent of LIHTC programs, which prioritize specific groups. Additionally, specialized units may remain unoccupied due to the failure to notify appropriate tenants. The affordability goal of the LIHTC program is then compromised, leading to a waste of valuable resources.

According to the National Low-Income Housing Coalition, ensuring that tenants are appropriately matched with units according to their needs can help reduce vacancy rates and improve the overall effectiveness of affordable housing programs.

These challenges highlight the need for strengthened partnerships between owner/agents, HFAs and nonprofit organizations to enhance the effectiveness of affordable housing programs. Better communication also significantly improves housing access and efficiency.

Best Practices for Improved Collaboration

To enhance communication and ensure timely placements, HFAs and nonprofits can:

• Use Integrated Waitlist Systems: Share databases for real-time access and updates to waitlist information.
• Establish Prioritization Protocols: Collaborate to define clear tenant prioritization criteria that align with regulatory requirements and community needs.
• Assign Liaisons: Designate staff to facilitate communication between owner/agents, HFAs and nonprofits.
• Provide Training: Offer joint sessions to ensure understanding of LIHTC regulations and tenant needs.

Conclusion

At ProLink, we’re working closely with our clients to optimize our platform and improve the management of waitlists, ensuring better communication between Housing Finance Agencies and nonprofits. We’re also exploring future solutions to further address waitlisting challenges and enhance collaboration, ultimately supporting the success of affordable housing programs.

The National Council of State Housing Agencies (NCSHA) hosted its annual HFA Institute from January 12 to 17, 2025, in Washington, DC. This comprehensive event featured four program-specific modules, with the Housing Credit module taking place from January 14 to 16. During this module, many sessions were available that addressed everything from housing credit compliance and development to recent regulatory updates.

The implementation of HUD’s Housing Opportunity Through Modernization Act (HOTMA) and the National Standards for the Physical Inspection of Real Estate (NSPIRE) is bringing significant changes to the affordable housing landscape. In several discussions led by industry experts, key strategies for navigating these updates were outlined, emphasizing the importance of compliance and adaptability. These sessions offered actionable insights for housing professionals. Here’s a closer look at the highlights, challenges, and strategies for success in this evolving regulatory environment.

HOTMA Implementation Strategies

For a discussion on HOTMA implementation strategies, Jillian Toole, Senior Policy and Strategy Manager for the Georgia Department of Community Affairs, was joined by several key players in affordable housing compliance to discuss how to implement HOTMA at Multifamily housing sites. They also provided a breakdown between Required and Discretionary policies. With Asset Limitation, for example, it is required to deny admission if family has more than $103,200 in net family assets OR if they own a disqualifying piece of real property. However, choosing to enforce policy upon annual or initial recertification is will be discretionary under HOTMA.

One challenge of HOTMA implementation denoted by the panel is the large-scale revisions HUD Multifamily Housing sites must undertake for their Tenant Selection Plans and EIV Policies & Procedures. Additionally, new HOTMA guidance adds new provisions to compliance and management as well as changes prior guidance. Panelists also provided clarification on mandatory policies, such as asset limitations and de minimis errors. You can view the presentation materials here.

Visit the HUD website to stay up-to-date on the latest HOTMA changes.

Physical Inspections Under the NSPIRE Protocol

Susan Westbrook, Manager of Rental Assets at North Carolina Housing Finance Agency, led a discussion on the National Standards for the Physical Inspection of Real Estate (NSPIRE) featuring panelists from the U.S. Department of Housing and Urban Development  (HUD), US Housing Consultants and Zeffert & Associates.

This session provided attendees a comprehensive understanding of the implementation timeline for NSPIRE and new scoring procedures. Panelists also reflected on NSPIRE one year in. Here are some highlights:

• Out of the top 10 defects causing the largest score deductions, 6 are Life-Threatening. The largest is “Exposed electrical conductor” with a deduction of 14.73 points per 100 units inspected.
• Out of the top 10 most commonly cited defects, 2 are Life-Threatening. The most common is “Smoke alarm is not installed where required” with an average defect count of 16.25 citations per 100 units inspected.
• Electrical, Egress, and Fire Safety defects impacted NSPIRE scores more than other types of defects.

You can view the presentation materials here.

The Housing Credit module at HFAi provided an in-depth look into the evolving regulatory landscape of affordable housing. The discussions on HOTMA and NSPIRE underscored the critical need for housing professionals to stay informed and adaptable. By embracing these changes and implementing the strategies shared by industry experts, stakeholders can effectively navigate the complexities ahead, ensuring continued compliance and the provision of quality affordable housing. Staying engaged with ongoing regulatory updates and participating in future industry events will be essential for success in this dynamic environment.

The National Council of State Housing Agencies (NCSHA) hosted its Housing Credit Connect conference in Atlanta from June 10-13, 2024, where the industry gathered to discuss key challenges and opportunities within affordable housing. The discussions ranged from legislative updates to new innovations within housing credit allocation and compliance. As NCSHA’s Annual Conference approaches, scheduled for September 28 – October 1, 2024, in Phoenix, several of these critical topics will be revisited, offering attendees a chance to delve deeper into the issues that continue to shape the industry.

Key Topics from Housing Credit Connect and Their Continuation in Phoenix

Compliance Challenges and Strategies

Compliance with federal and state regulations remains a persistent challenge for housing agencies and developers. In Atlanta, experts discussed new compliance trends and shared strategies for staying ahead of regulatory changes, particularly in an era of increased scrutiny and tighter budgets. The Phoenix conference will revisit these topics, providing updated insights into best practices for compliance, including the use of new technologies to streamline reporting and monitoring processes.

During the session “Keeping Up with Multifamily Compliance Through Technology and Training”, taking place on Monday, September 30^th, ProLink Solutions’ own Ryan Kim, VP of Professional Services, will join the panel in continuing the discussion around regulatory updates around the Housing Opportunity Through Modernization Act (HOTMA) and National Standards for the Physical Inspection of Real Estate (NSPIRE).

Innovative Financing and Development Strategies

Innovative financing mechanisms were a major focus in Atlanta, with sessions highlighting new approaches to leveraging private and public funds to support affordable housing development. In Phoenix, these discussions will continue, emphasizing the importance of creative financing in expanding the reach of housing credit programs. Topics range empowering women within housing finance to the process of leveraging state and local partnerships to locate more funding.

Sustainability and Green Building

Environmental sustainability in affordable housing was a key theme at Housing Credit Connect, with sessions exploring how green building practices can be integrated into housing credit projects. During Housing Credit Connect, Wendy Smith, Deputy Executive Director at Kentucky Housing Corporation, was joined by panelists during a session titled “Leveraging Energy Incentives in Affordable Housing” to discuss the Inflation Reduction Act (IRA) and its impact on energy efficiency and resiliency measures.

The upcoming Annual Conference will expand on these discussions, focusing on the long-term benefits of sustainable development practices and how they can be incentivized through housing credit programs. The conference will also explore the intersection of sustainability with equity, ensuring that environmentally friendly housing solutions are accessible to all income levels. Topics will be covered ranging from energy and water conservation to energy efficiency and resilience in affordable housing.

Data and Analytics in Housing

The role of data and analytics in improving housing outcomes was another critical topic in Atlanta. During Housing Credit Connect in Atlanta, Bettie Teasley, the Manager of Policy and Research at the North Carolina Housing Finance Agency, presented a session titled “Maximizing Outcomes with Data-Driven Policies”.

As housing agencies increasingly rely on data-driven decision-making, the Phoenix conference will continue to highlight how data can be used to optimize housing credit allocations, monitor program effectiveness, and ensure compliance. Sessions pertaining to this topic include “Bringing Data to Life: The Faces of Affordable Housing” and “The Horizon for Data and Analytics: Vision Setting and New Tools”.

For ProLink Solutions and other members within the affordable housing sector, these events are invaluable opportunities to stay informed, network with peers, and contribute to the dialogue shaping the future of housing policy and practice. By engaging with these recurring themes, attendees can expect to leave Phoenix with actionable insights and strategies that will help them navigate the complex terrain of affordable housing in the years to come​.

In 2024, navigating the real estate market has become a formidable challenge. With interest rates soaring, traditional market-rate housing deals are stalling, leaving developers, investors, and bankers/lenders looking for viable alternatives. For market-rate housing, this translates into higher mortgage rates for buyers, decreased purchasing power, and an overall cooling of demand. For developers, the increased cost of financing projects means tighter profit margins and greater financial risk. As a result, many market-rate projects are being shelved or scaled back due to unfavorable economic conditions.

This shift in the market dynamics is increasingly steering attention toward affordable housing projects, which, despite their complexities, offer unique opportunities in the current economic climate. Many of these new affordable housing opportunities are possible through promising new affordable housing programs under consideration by the federal government

Legislative Proposals

The Housing Supply Fund Act was introduced by Senator Sherrod Brown to propose creating a fund to help community development financial institutions and nonprofit housing organizations expand affordable housing options, including converting commercial properties into affordable. Meanwhile the Affordable Housing Preservation and Protection Act would provide HUD with the authority to offer loans for renovating distressed HUD-assisted housing, ensuring these properties remain affordable and are improved.

Tax Credits and Assistance Programs play a crucial role in reducing the burden on affordable housing development. They help offset the costs associated with these projects, making them financially viable for developers and attractive for investors. Here are some of the options that are available:

• Low-Income Housing Tax Credit (LIHTC): The administration seeks to expand LIHTC to build or preserve 1.2 million more affordable rental units.
• Neighborhood Homes Tax Credit: A new proposal aims to support the building or renovation of affordable homes in underserved neighborhoods.
• Down Payment Assistance: Proposals include up to $25,000 for first-generation homebuyers, which would help about 400,000 families.

These incentives make affordable housing projects significantly more attractive to both lenders and developers. The financial benefits provided by programs such as LIHTC and various federal and state grants can effectively reduce the overall costs and risks associated with affordable housing development. By lowering the debt burden and providing more predictable returns, these programs mitigate the impact of high interest rates. Consequently, lenders are more willing to finance affordable housing projects, seeing them as lower-risk investments with guaranteed government support.

Similarly, developers are incentivized to pursue affordable housing deals, where subsidies and tax credits improve profitability and project feasibility, compared to the uncertain and costlier market-rate housing ventures in a high-interest environment. This strategic shift not only helps developers and lenders maintain their business momentum but also contributes to addressing the ongoing affordable housing shortage.

This year, ProLink Solutions held an all-virtual conference, ProLink Technology Live 2022. The conference featured a number of guest speakers from all areas of the affordable housing industry and was split into two separate tracks, one for ProLinkHFA (multi-family) and one for ProLink+ (single-family). In total, 20 affordable housing organizations were represented in the audience. Our speaker lineup consisted of 6 employees from ProLink Solutions, as well as 8 industry experts from various affordable housing organizations.

Keynote – Washington Update

We started the conference with a special keynote from Jennifer Schwartz, the Director of Tax and Housing Advocacy at the National Council of State and Housing Agencies (NCSHA). Jennifer provided an update on Washington, and also touched up on a variety of topics including:

• FY 2023 HUD Budget Appropriations
• IRS’ final ruling on Average Income Test (AIT) in October 2022
• The IRS extending the Housing Credit Placed-In-Service and other deadlines at NCSHA’s request.

You can watch the session recording here.

Panel on 8823 Updates and Average Income Test

Kelly Encinias, the HFA Senior Product Manager at ProLink, was joined by several industry experts for a panel discussion on 8823 compliance and AIT final regulations released by IRS in October 2022. As part of this panel discussion, Virginia Housing’s Erica Etterling presented how the AIT final ruling is going to affect Virginia’s Average Income Guidance currently in place, including how property owners’ AIT reporting to the state is going to change.

You can watch the session recording here.

Procorem Use Cases Panel

Ryan Kim, VP of Sales & Marketing at ProLink, was joined by panelists representing different industry roles to discuss  a number of different Procorem use cases. Danny Escuder with Wisconsin Housing and Economic Development Authority (WHEDA) presented how the agency is utilizing Procorem to support the agency’s Multifamily Application submission process.

You can watch the session recording here.

In addition, we had six other software training sessions tailored to ProLinkHFA and ProLink+ products. You can access all session recordings here.

What to Expect from ProLink in the Coming Year

In 2023, ProLink plans to host a brand-new webinar series beginning in February. Subscribe to our newsletter to stay up-to-date with the latest news from ProLink as well as news about the affordable housing industry.