How Property Management & Asset Management Can Work Seamlessly in LIHTC Communities
by Jill Cromartie, HCCP
Consultant
Simple Asset Management
In the world of LIHTC housing, Property Management (PM) and Asset Management (AM) are two sides of the same coin. While PM is resident-facing — focused on day-to-day operations and the lived experience — AM operates behind-the-scenes on behalf of owners and investors, tracking performance and ensuring long-term viability. When both groups are aligned, the result is stronger financial performance, sustained compliance, and healthier communities. Here's how to make that partnership thrive across the lifecycle of a property.
Lease-Up Success Starts with Alignment
Before a project even reaches completion, developers are making critical projections: construction finish dates, leasing velocity, and full stabilization timelines. Missing these benchmarks can trigger negative adjusters and cost the project equity — whereas exceeding them can boost the developer’s return.
Property Management Should:
Start pre-leasing 30–60 days prior to the anticipated Placed-in-Service (PIS) date.
Send weekly leasing and traffic updates to AM.
Asset Management Should:
Communicate leasing strategies based on 8609 elections.
Monitor progress via Qualified Occupancy Summaries.
Set appropriate expectations with investors and lenders.
File Compliance & Income Qualification: Non-Negotiables
Tax credits are only generated once a unit is occupied by an income-qualified resident — making accurate qualification and pristine files essential.
Property Management Should:
Conduct prompt recertifications.
Maintain organized, audit-ready files.
Understand and manage the applicable fraction and Next Available Unit Rule.
Flag potential non-compliance early.
Asset Management Should:
Perform periodic compliance audits.
Advise action steps when findings occur.
Financial Health: Monthly Reporting as an Early Warning System
Monthly financials often reveal operational realities before they hit crisis levels. Climbing payables may signal cash flow issues; slipping occupancy could indicate pricing, condition, or competitive concerns.
Property Management Should:
Know the competitive landscape (rents, amenities, vacancies).
Implement moderate annual increases — especially when occupancy >95%.
Avoid large rent shocks, even if below max allowable rent.
Asset Management Should:
Track trends over time, not just monthly variances.
Ask questions and dig into outliers.
Inspections: Protecting Assets Without Overburdening Teams
Each LIHTC property represents millions in public and private investment. While inspections are critical, overlapping requests from agencies, lenders, and investors can strain onsite teams.
Property Management Should:
Maintain an inspection checklist aligned with investor/state standards.
Walk the property exterior regularly.
Enforce leases consistently.
Notify AM of upcoming agency or ownership inspections.
Involve AM when ownership support is needed for capital or maintenance items.
Asset Management Should:
Conduct annual sample unit inspections.
Proactively communicate recurring physical needs or risks to stakeholders.
Final Thought
PM and AM don’t succeed despite each other — they succeed because of each other. Clear communication, shared priorities, and a collaborative mindset convert tension into strength, ensuring LIHTC properties deliver both mission impact and financial value for years to come.
Disclaimer
NAHB is providing this information for general information only. This information does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind nor should it be construed as such.
The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action on this information, you should consult a qualified professional adviser to whom you have provided all of the facts applicable to your particular situation or question.
None of this tax information is intended to be used nor can it be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer.
The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
This article was originally published in the September 2025 edition of The Credential, part of NAHB’s Housing Credit Certified Professional (HCCP) program.