Compliance Monitoring vs Asset Management
What is the Difference?
by Melanie Shapiro, HCCP
Source: NAHB Housing Credit Certified Professional program
"This has been a most unusual year in the tax credit industry. Given the state of the economy and the difficulty in securing traditional investors in the low income housing tax credit (LIHTC) program, Congress enacted the Tax Credit Assistance (TCAP) and Credit Exchange programs through the American Recovery and Reinvestment Act of 2009 to provide necessary
gap financing resources to stalled LIHTC projects. This gap financing will allow many LIHTC projects to go forward even if no traditional investor or syndicator can be found.
By utilizing the TCAP and Exchange funds, the state housing finance agency (HFA) will essentially become the investor. If there is no other investor in the deal, the HFA is required to take on the asset management function that the investor would normally handle, or contract for performance of these asset management services. But HFAs already conduct compliance monitoring. So, just what is the difference between these two roles?"