Asset Management – Process & Reporting

During the Construction phase, Asset Management monitors the progress of construction. We receive reports on a monthly basis to check the progress of the buildings and check the budget for the project. We also receive a quarterly questionnaire to check in with the General Partner (see Reporting Requirements below).

While monitoring the progress of the construction, Asset Management also works with the General Partner and Property Managers to prepare for the operation of the property. We check all pertinent management documents, such as:

• Property Management Agreement
• Management Plan
• Model Lease
• Tenant Selection Plan
• Marketing Plan
• Reasonable Accommodation
• Support Services Agreement
• Rent Schedule
• Updated Budget

Approximately 90 days before the lease-up period, we will have a pre-occupancy meeting to discuss the levels of regulatory restrictions, partnership requirements, management agreements, the lease-up schedule, and other issues that may occur. Invitees to the Pre-Occupancy Meeting may include the State Housing Authority and other regulatory agencies, the general partner, property management company, and compliance consultant.

Reporting Requirements

We ask that all files and reports be submitted electronically, if possible, to Asset Management.

• Monthly: requisitions for construction loan draws (including AIA form G703, G702 and G701)
• Monthly: updated Total Development Budget, with revised estimates for cost to complete
• Periodic: schedule of values
• All change orders and lien waivers and change order summary log
• Relevant correspondence by architect, construction manager, consulting engineer or HFA inspector
• Construction meeting minutes
• Construction Questionnaire

When construction is complete, Asset Management collects information regarding the completion of construction and begins monitoring the project’s operations to ensure a successful lease-up process and that regulatory requirements are met.

Asset Management receives copies of the Certificates of Occupancy for the buildings in the property, as well as certificates of substantial completion, notifications of incomplete work, escrow analysis, and other relevant reports. (See Reporting Requirements to see which reports should be sent to Asset Management.)

During lease-up, Asset Management receives monthly reports of the number of units leased, with an updated schedule of leasing. (See Reporting Requirements below.)

During the lease-up, Evernorth requires a third-party file review for 100% of the tax credit units.  It is recommended that the reviews are completed prior to move-in to mitigate risk as much as possible.  Once the property has been fully leased, we will need a Qualified Occupancy Report from the third party consultant and Evernorth will conduct a physical inspection to ensure that everything is in compliance. 

Evernorth requires the property management company to send an electronic copy of all initial tenant files to us, as well as a copy of the leasing compliance certification required by the state housing authority.  The quarterly questionnaire that was prepared for Asset Management during construction will continue to be updated and sent to Asset Management during the lease-up period.

Reporting Requirements

 We ask that all files and reports be submitted electronically, if possible, to Asset Management.

• Certificate of Occupancy
• Certificate of Substantial Completion
• Monthly as of the end of each month: Tenant Occupancy Summary.
• Within 90 days: Cost Certification and Credit Basis Report
• Within 90 days: Form 8609 from the state HFA
• At 100% lease-up: leasing compliance certification required by state, detailing all initial qualifying tenants: Compliance Certification-Tenant Information Format (ME) or Qualified Basis Tracking Sheet (NH) and completed IRS Form 8609
• At 100% lease-up: copies of all initial qualifying tenant files

Once a property has begun leasing, Evernorth Asset Management receives operational data on each property on an ongoing, quarterly basis. The reporting requirements show which financial and leasing reports are required. Quarterly reports are due 15 days (Vermont) or 30 days (Maine and New Hampshire) after the end of each quarter.

Please complete the Operations Quarterly Questionnaire and upload it to our website portal, or send it along with the other operational data to Asset Management.

Reporting Requirements

We ask that all files and reports be uploaded to our website portal, or submitted electronically, if possible, to Asset Management.

Within 15- 30 days after calendar quarter end unaudited Quarterly Financial Reports for preceding quarter to include:

• Quarterly Questionnaire certified by General Partner
• Balance Sheet (Accrual based, Year-to-Date)
• Income Statement or Budget to Actual (Accrual based, Year-to-Date)
• Occupancy Status Report or Three (3) months of occupancy including vacancy
• Operating and Replacement reserve statements (GL Accruals or Bank Statements are acceptable) showing contributions, distributions, and balance information
• Aged Receivables Report (A/R) detailing tenant rent receivables by unit for 30, 60, 90+ days
• Other information as may be requested
• Proof of payment of real estate taxes preferably by anniversary date of tax cycle
• Copies of any reviews and site inspection reports by state HFA, REAC, or Mortgage-Holder Inspections conducted in current year
• Copies of any notice of default or findings of non-compliance, including IRS Form 8823, and any notice of pending IRS audit or recapture of tax credits

During the year, properties are required to send reports to the State HFA and file federal tax returns. Additionally, the state HFA’s conduct compliance reviews at properties. As part of Evernorth’s reporting requirements, properties are to send copies of these reports to us. Please check the reporting requirements to see when you should be sending reports to us. The reporting deadline schedule for fiscal year-end 12/31 can be printed here, and the reporting deadline schedule for fiscal year-end 10/31 can be printed here.

Reporting Requirements

We ask that all files and reports be uploaded to our website portal, or submitted electronically, if possible, to Asset Management. Proprietary funds, please check your LPA Exhibit Reporting Requirements.

• Within 30 days after due date: copies of all required annual submissions to State HFA, including owner’s certification and leasing compliance report
• 45 days after the end of the fiscal year: submission of draft federal income tax return with supporting documents are due to Evernorth’s accountants Otis Atwell in South Portland, ME
• 60 days after the close of the fiscal year: submission of partnership’s audited financial statements are due to Otis Atwell
• 60 days after the close of the fiscal year: certification by General Partner regarding disclosure of any violations
• 75 days after the close of the fiscal year: submission of federal income tax return to the Fund
• 30 days prior to the fiscal year end: submission of partnership’s operating budget and proposed rent schedule for the next year
• 30 days prior to the fiscal year end: submission of Pre-Audit Questionnaire
• Proof of payment of real estate taxes and renewal of property insurance, preferably by anniversary date of tax cycle and policy term (all proofs of payment, can be included in next quarterly reporting cycle)
• Financial statements of Developer, Sponsor and/or General Partner, preferably within 90 days of subject’s fiscal year end
• Copies of any reviews and site inspection reports by state HFA or first mortgage lender conducted in current year (can be included in next quarterly reporting cycle)
• Copies of any notice of default or findings of non-compliance, including IRS Form 8823, and any notice of pending IRS audit or recapture of tax credits

8823 Notification

When you receive a notice of 8823 Noncompliance from the State Housing Authority, please immediately notify the Evernorth Asset Management Team. If the 8823 Form is uncorrected, we will work with you to correct the violation within the prescribed time.

Annual Budget and Rent Schedule

Annual Budgets and rent schedules should be submitted to Evernorth 30 days prior to the end of the fiscal year. While we prefer approved budgets, please send a copy of the budget and rent schedule, even if it has not been approved.

Insurance

All copies of renewal of insurance should be sent to the Evernorth Asset Management Team if not automatically provided by the insurance broker/agent.

Real Estate Taxes

Please send copies of Real Estate Tax bills to Evernorth, along with proof of payment. You can send this to us as part of the regular Quarterly Reporting package.

Reserve Access Request

Please complete the 2022 Evernorth Replacement Reserve Access Request form to request access to operating or replacement reserve funds. For additional reserve requirements including minimum balance and distribution information, please refer to the project’s LPA.

Every five years a new Capital Needs Assessment (CNA) should be completed. If it’s been more than 5 years since the last one for the property we will discuss how to get one scheduled. 

Every year a 5-year Capital Plan should be completed, based on recommendations from the CNA and current property needs. This should be submitted with the budget (October 15th).

HART Report is due by October 1st for the previous fiscal year. If you are a property manager and not a co-owner, Evernorth will need the information for this report so we can submit it. For more information and the form check out https://accd.vermont.gov/housing/resources-rules/EO-03-16.

Annual Owner Certifications are due February 28th. If you are a property manager, please fill out and Evernorth will sign as owner. If you are a co-owner, please send us a copy when you complete this. You can find the forms here: Forms & documents | VHFA.org – Vermont Housing Finance Agency

Form 8703 – we will send you a separate email with a spreadsheet of your properties with a few questions to answer. Please complete this and return to us so we can fill out and submit these forms. Not every property requires this so please check the spreadsheet we send to see what is needed. Evernorth needs to submit this form by March 31st.

Act 68 Certifications. You can check the status of your properties at https://www.housingdata.org/find-rental-housing. If the certificate is expiring the end of this year, a new application is due by February 28th. Forms and resources are available at https://www.vhfa.org/rentalhousing/managingagents/propertymanagers/act68. 

Capital Magnet Fund Reporting requires information on income levels at specific properties. Your Asset Manager will reach out to you with details. Due February 15^th.

Each year when the tax bills come out please send us a copy, along with any notices of assessment or deadline information if we need to file a tax grievance.