Question from a Blog Reader

"I want to be able to access the HUD EIV system for my tax credit properties that don't have HUD funding. How can we make this happen? I want to find a way to cut down on the burdensome LIHTC certification process." 

Answer

Summary: EIV access for LIHTC purposes is probably not as good an idea as it may seem. We DO have another suggestion, though.

We understand the surface appeal of getting access to EIV for LIHTC purposes, but the below will help explain why we think that getting this access is a long shot and likely not desirable in the final analysis. EIV is based on a framework of MOUs between HUD, the Social Security Admin, and DSS. Each agency shares very sensitive data through linked databases, and there are strict protocols with respect to who can access the data and when. HUD properties can use this data to verify and/or calculate sources of income. 

The primary impediment to LIHTC access to EIV data is that the federal agency involved (Treasury/IRS) is very unlikely to enter the MOUs. They are not an agency that can manage the access and security for the system like HUD has through the very expensive TRACS system. The IRS's involvement in the LIHTC housing program is only incidental to monitoring a tax benefit. Unlike HUD, Treasury’s mission is not to provide housing and housing is not supportive of the IRS’ mission, unlike it is for Social Security and DSS. We do not think the cost to the IRS would be defensible.

An alternative we have heard floated is that HFAs could enter the arrangement. We do not think that there is a tremendous appetite to add 52 HFAs, plus other allocating entities to the already complex EIV MOU system. Getting software protocols to synch up alone would be a monumental task, if all HFA’s even had online software systems. They do not. 

Non-HUD LIHTC properties are not likely to want access to EIV. It requires extensive and expensive security, education, reporting, and follow-up. The benefit of to-the-dollar accuracy is of minimal value to a program that only determines eligibility for occupancy. Unlike HUD PBRA programs, which cost the taxpayers billions of dollars each year in rental assistance, the benefit of extreme accuracy is just not as compelling for LIHTC purposes.

For HUD LIHTC properties, EIV only provides income data after move-in. The primary LIHTC eligibility moment is move-in. As most properties are 100% LIHTC and not subject to any income recertification after move-in per federal statute, most LIHTC properties would have no federally defensible use for the data. There could be limited use for properties that are less than 100% LIHTC, but that is a very limited universe of projects to try and mount a credible argument for EIV access for them.

Where should we focus our efforts? We applaud the effort to simplify the LIHTC income verification process. However, it is likely that EIV would actually complicate the lives of LIHTC managers for no real benefit. Working to adjust key players in the industry's viewpoint on unnecessarily conservative verification and calculation policies would create a much better result, and is where Costello recommends focusing efforts. 

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Check HERE! We will have a session on where policy adjustment regarding LIHTC verifications could help with current staffing issues. Intrigued? This is just one of many to be discussed at this year's Compliance Summit Events. Virtual seats are still available! 

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