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Administration Releases FY 2017 Budget

WASHINGTON– Feb. 9, 2016

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President Barack Obama today released his $4.2 trillion fiscal year (FY) 2017 budget, the final budget request of his presidency. For the U.S. Department of Housing and Urban Development (HUD), the budget requests $48.9 billion in gross discretionary funding, a 15 percent increase over FY 2016. The budget also calls for a new $11 billion in mandatory spending over the next 10 years for programs to house homeless families, including $8.8 billion for housing choice vouchers and $2.2 billion for short-term assistance.

The budget proposes changes to reform and expand the Low-Income Housing Tax Credit (LIHTC) program, including allowing states to convert up to 18 percent of each state’s private-activity bond volume cap into additional LIHTC authority; allowing the income-average rule for LIHTC eligibility; adding to the selection criteria for LIHTC allocation the preservation of federally assisted affordable housing; making affirmatively furthering fair housing an explicit preference in qualified allocation plans (QAPs); allowing HUD to designate as a qualified census tract (QCT) any census tract that meets certain criteria for the prevalence of poverty or low-income households; and adding protection for victims of domestic violence as a mandatory provision of the long-term-use agreement. The proposal would also modify and permanently extend the new markets tax credit (NMTC) at $5 billion and the renewable energy investment tax credit (ITC) and production tax credit (PTC).

Further analysis will be available on the Notes from Novogradac blog.

HUD Considers Rulemaking on Over-Income Households

WASHINGTON– Feb. 3, 2016

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The U.S. Department of Housing and Urban Development (HUD) today announced in the Federal Register that it is considering making a rule to address the number of households in public housing whose incomes significantly exceed the income limit for a sustained period after initial admission. Current regulations do not require eviction or termination of tenancy for households whose incomes rise above the limit for initial admission.  In an effort to provide scarce affordable housing resources to those most in need, HUD is considering determining circumstances that would require a public housing agency (PHA) to terminate tenancy or evict an over-income family. Comments on the proposed rulemaking are due March 4. 

HUD’s consideration was prompted by 2015 report findings from HUD’s Office of Inspector General (OIG) that as many as 25,226 families in public housing exceeded HUD’s 2014 eligibility income limits. OIG estimates that HUD will pay $104.4 million in one year for over-income families to live in public housing.  The OIG report also notes HUD estimates that if all over-income families were removed from the public housing program, it would need to request nearly $116.5 million more in public housing operating subsidies annually.

FHA Updates MAP Guide

WASHINGTON– Feb. 2, 2016

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The Federal Housing Administration (FHA) today released an updated Multifamily Accelerated Processing (MAP) Guide that combines all FHA multifamily underwriting guidance into one document. The updated MAP Guide includes revised chapters that discuss the low-income housing tax credit (LIHTC) and other tax credits, as well as master lease structuring to facilitate the use of new markets tax credits (NMTCs) and historic tax credits (HTCs). The U.S. Department of Housing and Urban Development (HUD) said the revised MAP Guide is intended to streamline loan application approvals and to promote consistency across all HUD processing offices. Requirements of the revised guide apply to loans for which an initial application for firm commitment is submitted by May 28.

FHA to Reduce Insurance Rates for Multifamily Mortgages

WASHINGTON– Jan. 28, 2016

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U.S. Department of Housing and Urban Development (HUD) Secretary Julián Castro today announced the Federal Housing Administration (FHA) will reduce multifamily mortgage insurance rates to encourage capital financing of affordable and energy-efficient housing. The reduced rates will be 25 basis points for broadly affordable housing, defined as properties with 90 percent of the units assisted by the low-income housing tax credit (LIHTC) or Section 8; 35 basis points for mixed-income properties; and 25 basis points for energy-efficient properties that meet certain performance standards. The reduced rates take effect April 1. FHA estimates the reductions will spur an additional 12,000 units of affordable housing to be rehabilitated each year, benefitting nearly 40,000 families over the next three years.

FHA will also reduce certain upfront multifamily mortgage insurance premiums for FHA commitments issued or reissued beginning April 1.

Tune in to the Feb. 2 Tax Credit Tuesday podcast to learn more.

HUD Proposes FY 2016 Mortgage Insurance Premium Changes

WASHINGTON– Jan. 27, 2016

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The U. S. Department of Housing and Urban Development (HUD) in the Federal Register tomorrow will propose changes to the fiscal year (FY) 2016 mortgage insurance premiums for certain Federal Housing Administration (FHA) multifamily housing insurance programs. The proposed upfront capitalized MIP for affordable housing is 25 or 30 basis points, depending on HUD’s classification of the property, and 25 basis points for green and energy-efficient housing. There are no proposed MIP changes for market-rate housing. The proposed FY 2016 MIP rates would be effective for commitments issued or reissued beginning April 1, 2016. Comments are due 30 days after publication in the Federal Register.

 

HUD Issues HOME Underwriting and Subsidy Layering Guidelines

WASHINGTON– Jan. 7, 2016

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In Notice CPD-15-11 the U.S. Department of Housing and Urban Development (HUD) provides guidance to participating jurisdictions in its HOME Investments Partnerships (HOME) program. The guidance concerns the development and implementation of written subsidy (including the low-income housing tax credit [LIHTC]) layering and underwriting guidelines in accordance with HOME regulations. Those guidelines are to evaluate and ensure that the HOME investment doesn’t exceed the amount necessary to provide quality affordable housing that is financially viable.

 

HUD Announces Finalized Fair Housing Assessment Tool

WASHINGTON– Dec. 31, 2015

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The U.S. Department of Housing and Urban Development (HUD) today announced the availability of its final, approved affirmatively furthering fair housing assessment tool. The tool was developed for recipients of funding from Community Development Block Grants (CDBGs), the HOME Investment Partnerships program (HOME), Emergency Solutions Grants (ESG) or Housing for Persons with AIDS (HOPWA) when conducting and submitting their own assessments of fair housing. The assessment tool helps federal grantees identify patterns of integration and segregation, racially and ethnically concentrated areas of poverty, disparities in access to opportunity and disproportionate housing needs. For purposes of the assessment tool, no assessment of fair housing will be due before Oct. 4, 2016.

 

President Signs FY2016 Omnibus, Tax Extenders Legislation

WASHINGTON– Dec. 18, 2015

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President Barack Obama today signed the $1.1 trillion Consolidated Appropriations Act of 2016 and the tax-extending, $680 billion, Protecting Americans From Tax Hikes (PATH) Act of 2015. The bills include provisions to permanently extend the minimum 9 percent low-income housing tax credit (LIHTC), extend the new markets tax credit (NMTC) for five years at $3.5 billion annually through 2019, and extend and gradually phase down the renewable energy investment tax credit (ITC) and production tax credit (PTC) through 2021.
For more detailed information on the bills, see the Notes from Novogradac blog.

 

Congress Unveils FY2016 Omnibus Spending Bill, Extenders Legislation

WASHINGTON– Dec. 16, 2015

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The House Appropriations Committee today released the $1.1 trillion Consolidated Appropriations Act of 2016. The fiscal year (FY) 2016 omnibus spending bill provides $38.6 billion net spending for the U.S. Department of Housing and Urban Development (HUD), including:

  • $950 million for the HOME Investment Partnerships program,
  • $19.6 billion for the Housing Choice Voucher program,
  • $10.6 billion for renewal of project-based rental assistance contracts and
  • $2.3 billion for homeless assistance grants, among numerous other programs.

The spending bill also extends the renewable energy production tax credit (PTC) for wind energy through 2016 at prior levels, phasing them out after 2019. The legislation extends the temporary 30 percent solar ITC and the temporary credit for solar residential energy through 2019, then phases the 30 percent investment tax credit (ITC) out after 2021. The House will likely vote on the bill Friday.

In other news, House and Senate leadership yesterday announced the Protecting Americans from Tax Hikes (PATH) Act of 2015, a $650 billion extenders bill that extends or makes permanent several temporary tax provisions. The bill:

  • makes permanent the minimum 9 percent low-income housing tax credit (LIHTC) applicable percentage or rate for federally unsubsidized developments,
  • extends the new markets tax credit (NMTC) for five years at $3.5 billion annually through 2019,
  • and makes permanent the military housing allowance exclusion for LIHTC income qualification for personnel stationed at or near certain military bases.

The House will consider it on Thursday. The Senate could consider it shortly thereafter on Friday, but if some Senators decide to slow consideration, it could take until Dec. 22 for final passage. The president is expected to sign it. More information about the extenders bill can be found in the section-by-section summary here and on the Notes from Novogradac blog. More information on the omnibus will also be available on the Notes from the Novogradac blog.

FHFA Seeks Comments on Duty to Serve Rule

WASHINGTON – Dec. 15, 2015

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The Federal Housing Finance Agency (FHFA) today issued a proposed rule that would provide Duty to Serve credit for eligible Fannie Mae and Freddie Mac activities that facilitate a secondary market for mortgages on residential properties in the specified underserved markets, including affordable housing preservation, rural housing and manufactured housing. The rule proposes that the government sponsored enterprises (GSEs) receive Duty to Service credit for activities related to the U.S. Department of Housing and Urban Development's (HUD's) rental assistance demonstration (RAD) program and Choice Neighborhood Initiative. Additionally, the proposed rule requests comments on whether the GSEs should resume equity investments in low-income housing tax credit (LIHTC) developments; once, significant LIHTC equity investors, the GSEs ceased LIHTC investing before entering conservatorship in 2008 .

JCHS Report Finds Unprecedented Rental Housing Demand

CAMBRIDGE, Mass. – Dec. 10, 2015

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The Joint Center for Housing Studies (JCHS) of Harvard University yesterday released “America’s Rental Housing: Expanding Options for Diverse and Growing Demand,” a report on the record growth of rental housing demand. The study found that between 2005 and mid-2015, the number of renter households increased by 9 million— the largest gain in any 10-year period on record. JCHS reported that as the rental market continues to tighten, affordability challenges grow for both low- and moderate-income households. The report explored how expanding low-income housing tax credit (LIHTC) and U.S. Department of Housing and Urban Development (HUD) funding could better serve cost-burdened households.

Tune into the Dec. 15 Tax Credit Tuesday podcast to learn more.

 

HUD Designates 2016 DDAs, QCTs

WASHINGTON – Nov. 20, 2015

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In Tuesday's Federal Register, the U.S. Department of Housing and Urban Development (HUD) will publish a notice designating difficult development areas (DDAs) and qualified census tracts (QCTs) for 2016 for purposes of the low-income housing tax credit (LIHTC). LIHTC developments in DDAs or QCTs are eligible for as much as 30 percent more LIHTC subsidy. For the first time in 2016, DDAs inside metropolitan statistical areas (MSA) will be divided by ZIP codes, rather than counties. As a result, the newly formed small area difficult development areas (SADDAs) will be substantially smaller and more numerous.

Compared to previous designations, this notice:

  1. Provides a six-month delay in the implementation of 2016 DDAs and QCTs from Jan. 1 to July 1, 2016,
  2. Extends from one to two years the period for which previous QCT and DDA designations are effective,
  3. Describes a strengthening of the data quality standards for 2016 QCTs.

Learn more about comprehensive DDA changes on the Notes from Novogradac blog.

 

Obama Signs Two-Year Budget Legislation

WASHINGTON – Nov. 2, 2015

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President Barack Obama today signed the Bipartisan Budget Act of 2015. The legislation suspends the debt limit through March 2017 and lifts spending limits through September 2017. The deal raises sequestration caps and increases discretionary spending by about $50 billion in fiscal year (FY) 2016 and $30 billion in FY 2017, split evenly between defense and domestic spending. Congress passed the legislation last week with votes of 64-35 in the Senate and 266-167 in the House.

Read about the bill’s implications for tax credit partnerships on the Notes from Novogradac blog.

 

HUD Sets 2016 Operating Cost Adjustment Factors

WASHINGTON – Oct. 9, 2015

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In the Oct. 13 Federal Register, the U.S. Department of Housing and Urban Development (HUD) will publish a notice establishing the operating cost adjustment factors (OCAFs) for project-based assistance contracts for eligible multifamily housing properties that have an anniversary date on or after Feb. 11, 2016. The factors are used to adjust Section 8 rents in housing assistance payment contracts renewed under Sections 515 and 524 of the Multifamily Assisted Housing Reform and Affordability Act of 1997. OCAFs are calculated as the sum of weighted average cost changes for wages, employee benefits, property taxes, insurance, supplies and equipment, fuel oil, electricity, natural gas and water/sewer/trash. The 2016 OCAFs are effective Feb. 11, 2016.

 

HUD Announces FY 2016 MIPs

WASHINGTON – Oct. 2, 2015

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The U.S. Department of Housing and Urban Development (HUD) today announced the mortgage insurance premiums (MIPs) for Federal Housing Administration (FHA) multifamily, health care facilities and hospital mortgage insurance programs that have commitments to be issued or reissued in fiscal year (FY) 2016. The FY 2016 MIPs are the same as FY 2015 MIPs, which were published in the Federal Register March 31, 2014. The first-year upfront MIP fee for multifamily, health care facilities and hospital programs is 50 basis points. The FY 2016 MIPs became effective Thursday.

 

Congress Passes Stopgap Spending Bill

WASHINGTON – Sept. 30, 2015

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Congress today passed a stopgap spending bill that will keep the federal government funded through Dec. 11. The Senate passed the bill this morning with a vote of 78-20 and the House later approved it 277-151.  President Barack Obama is expected to sign the bill today. To avoid a government shutdown, a stopgap spending bill needs to be passed before the start of the 2016 fiscal year (FY) Thursday.

 

HUD Announces Proposed Fair Market Rents for 2016

WASHINGTON – Sept. 3, 2015

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The U.S. Department of Housing and Urban Development (HUD) today released the fiscal year 2016 (FY 2016) proposed fair market rents (FMRs) to determine payment standards for the Housing Choice Voucher (HCV) program, initial renewal rents for some expiring project-based Section 8 contracts and initial rents for housing assistance payment contracts in the Moderate Rehabilitation Single Room Occupancy (SRO) program. FMRs also serve as rent ceilings in the HOME Investments Partnerships program. A preamble addressed the upcoming publication of FMRs in the Federal Register, as well as the advance notice of proposed rulemaking on small area FMRs that was published June 2. HUD also posted the proposed FY 2016 small-area FMRs for five demonstration participants and the proposed FY 2016 exception FMRs for manufactured home spaces in the HCV program.

Tune in to the Sept. 8 episode of the Tax Credit Tuesday podcast to learn more.

News Archives

 

 

LIHTC News
  • WASHINGTON, D.C. - October 16, 2012
    The Internal Revenue Service (IRS) today published the amounts of unused low-income housing tax credit (LIHTC) carryovers for calendar year 2012 that were allocated to 34 qualified states and Puerto Rico... Full Article