Notice 2011-47, Relief from Certain Low-Income Housing Credit Requirements Due to Sever Storms, Tornadoes, and Flooding in Missouri

Part III-Administrative, Procedural, and Miscellaneous
Relief from Certain Low-Income Housing Credit Requirements Due to Severe
Storms, Tornadoes, and Flooding in Missouri

Notice 2011-47
The Internal Revenue Service is suspending certain requirements under
§ 42 of the Internal Revenue Code for low-income housing credit projects in the
United States to provide emergency housing relief needed as a result of the
devastation caused by severe storms, tornadoes, and flooding in Missouri
beginning on April 19, 2011. This relief is being granted pursuant to the
Service’s authority under § 42(n) and § 1.42-13(a) of the Income Tax
Regulations.
BACKGROUND
On May 9, 2011, the President declared a major disaster for the State of
Missouri. This declaration was made under the Robert T. Stafford Disaster Relief
and Emergency Assistance Act, 42 U.S.C. 5121 et seq. Subsequently, the
Federal Emergency Management Agency (FEMA) designated jurisdictions for
Individual Assistance. The State of Missouri has requested that the Service
allow owners of low-income housing credit projects to provide temporary housing
in vacant units to individuals who resided in jurisdictions designated for Individual

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Assistance in Missouri and who have been displaced because their residences
were destroyed or damaged as a result of the devastation caused by the severe
storms, tornadoes, and flooding. Based upon this request and because of the
widespread damage to housing caused by the severe storms, tornadoes, and
flooding, the Service has determined that the Missouri Housing Development
Commission (Commission) may provide approval to project owners to provide
temporary emergency housing for displaced individuals in accordance with this
notice.
I. SUSPENSION OF INCOME LIMITATIONS
The Service has determined that it is appropriate to temporarily suspend
certain income limitation requirements under § 42 for certain qualified low-income
projects. The suspension will apply to low-income housing projects approved by
the Commission, in which vacant units are rented to displaced individuals. The
Commission will determine the appropriate period of temporary housing for each
project, not to extend beyond June 30, 2012 (temporary housing period).
II. STATUS OF UNITS
A. Units in the first year of the credit period
A displaced individual temporarily occupying a unit during the first year of
the credit period under § 42(f)(1) will be deemed a qualified low-income tenant
for purposes of determining the project’s qualified basis under § 42(c)(1), and for
meeting the project’s 20-50 test or 40-60 test as elected by the project owner
under § 42(g)(1). After the end of the temporary housing period established by

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the Commission (not to extend beyond June 30, 2012), a displaced individual will
no longer be deemed a qualified low-income tenant.
B. Vacant units after the first year of the credit period
During the temporary housing period established by the Commission, the
status of a vacant unit (that is, market-rate or low-income for purposes of § 42 or
never previously occupied) after the first year of the credit period that becomes
temporarily occupied by a displaced individual remains the same as the unit’s
status before the displaced individual moves in. Displaced individuals
temporarily occupying vacant units will not be treated as low-income tenants
under § 42(i)(3)(A)(ii). However, even if it houses a displaced individual, a lowincome or market rate unit that was vacant before the effective date of this notice
will continue to be treated as a vacant low-income or market rate unit. Similarly,
a unit that was never previously occupied before the effective date of this notice
will continue to be treated as a unit that has never been previously occupied
even if it houses a displaced individual. Thus, the fact that a vacant unit
becomes occupied by a displaced individual will not affect the building’s
applicable fraction under § 42(c)(1)(B) for purposes of determining the building’s
qualified basis, nor will it affect the 20-50 test or 40-60 test of § 42(g)(1). If the
income of occupants in low-income units exceeds 140 percent of the applicable
income limitation, the temporary occupancy of a unit by a displaced individual will
not cause application of the available unit rule under § 42(g)(2)(D)(ii). In addition,
the project owner is not required during the temporary housing period to make

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attempts to rent to low-income individuals the low-income units that house
displaced individuals.
III. SUSPENSION OF NON-TRANSIENT REQUIREMENTS
The non-transient use requirement of § 42(i)(3)(B)(i) shall not apply to any
unit providing temporary housing to a displaced individual during the temporary
housing period determined by the Commission in accordance with section I of
this notice.
IV. OTHER REQUIREMENTS
All other rules and requirements of § 42 will continue to apply during the
temporary housing period established by the Commission. After the end of the
temporary housing period, the applicable income limitations contained in
§ 42(g)(1), the available unit rule under § 42(g)(2)(D)(ii), the nontransient
requirement of § 42(i)(3)(B)(i), and the requirement to make reasonable attempts
to rent vacant units to low-income individuals shall resume. If a project owner
offers to rent a unit to a displaced individual after the end of the temporary
housing period, the displaced individual must be certified under the requirements
of § 42(i)(3)(A)(ii) and § 1.42-5(b) and (c) to be a qualified low-income tenant. To
qualify for the relief in this notice, the project owner must additionally meet all of
the following requirements:
(1) Major Disaster Area
The displaced individual must have resided in a Missouri jurisdiction
designated for Individual Assistance by FEMA as a result of the severe storms,
tornadoes, and flooding in Missouri beginning on April 19, 2011.

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(2) Approval of the Missouri Housing Development Commission
The project owner must obtain approval from the Commission for the relief
described in this notice. The Commission will determine the appropriate period of
temporary housing for each project, not to extend beyond June 30, 2012.
(3) Certifications and Recordkeeping
To comply with the requirements of § 1.42-5, project owners are required
to maintain and certify certain information concerning each displaced individual
temporarily housed in the project, specifically: name, address of damaged
residence, social security number, and a statement signed under penalties of
perjury by the displaced individual that, because of damage to the individual’s
residence in a Missouri jurisdiction designated for Individual Assistance by FEMA
as a result of the severe storms, tornadoes, and flooding beginning on April 19,
2011, the individual requires temporary housing. The owner must notify the
Commission that vacant units are available for rent to displaced individuals.
The owner must also certify the date the displaced individual began
temporary occupancy and the date the project will discontinue providing
temporary housing as established by the Commission. The certifications and
recordkeeping for displaced individuals must be maintained as part of the annual
compliance monitoring process with the Commission.
(4) Rent Restrictions
Rents for the low-income units that house displaced individuals must not
exceed the existing rent-restricted rates for the low-income units established
under § 42(g)(2).

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(5) Protection of Existing Tenants
Existing tenants in occupied low-income units cannot be evicted or have
their tenancy terminated as a result of efforts to provide temporary housing for
displaced individuals.
EFFECTIVE DATE
This notice is effective May 9, 2011 (the date of the President’s major
disaster declarations as a result of the severe storms, tornadoes, and flooding in
Missouri beginning on April 19, 2011).
PAPERWORK REDUCTION ACT
The collection of information contained in this notice has been reviewed
and approved by the Office of Management and Budget in accordance with the
Paperwork Reduction Act (44 U.S.C. 3507) under control number 1545-2210.
An Agency may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless the collection of information
displays a valid OMB control number.
The collection of information in this notice is in the section titled “OTHER
REQUIREMENTS” under “(3) Certifications and Recordkeeping.” This
information is required to enable the Service to verify whether individuals are
displaced as a result of the devastation caused by severe storms, tornadoes, and
flooding in Missouri beginning on April 19, 2011, and thus warrant temporary
housing in vacant low-income housing units. The collection of information is
required to obtain a benefit. The likely respondents are individuals and
businesses.

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The estimated total annual recordkeeping burden is 125 hours.
The estimated annual burden per recordkeeper is approximately 15
minutes. The estimated number of recordkeepers is 500.
Books or records relating to a collection of information must be retained as
long as their contents may become material to the administration of the internal
revenue law. Generally, tax returns and tax return information are confidential,
as required by 26 U.S.C. 6103.
DRAFTING INFORMATION
The principal author of this notice is David Selig of the Office of the
Associate Chief Counsel (Passthroughs and Special Industries). For further
information regarding this notice, contact Mr. Selig at (202) 622-3040 (not a toll
free call).