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FHFA SETS NEW HOUSING GOALS FOR FANNIE, FREDDIE

WASHINGTON, D.C. - September 2, 2010

The Federal Housing Finance Agency (FHFA) announced today that it has sent a final rule to the Federal Register that establishes its 2010 to 2011 housing goals for Fannie Mae and Freddie Mac. In response to market conditions, the FHFA’s final rule set goals lower than initially proposed. The rule sets three multifamily goals: Fannie Mae is to acquire mortgages that finance at least 177,750 low-income rental units and 42,750 very low-income rental units; Freddie Mac is to acquire mortgages that finance at least 161,250 low-income rental units and 21,000 very low-income rental units; and both enterprises must report on their acquisition of mortgages involving low-income units in small (5- to 50-unit) multifamily properties. The rule also changes the way that goal compliance is measured and prohibits using the purchase of mortgages in private-label securities to meet their goals. The final rule will take affect 30 days after it is published in the Federal Register.

Tune in to the next Tax Credit Tuesday podcast to hear more about these housing goals and the other changes included in the FHFA rule.

WISCONSIN SECTION 1602 GRANTEES REMINDED OF 30 PERCENT TEST DEADLINE

MADISON, WIS. - September 1, 2010

The Wisconsin Housing and Economic Development Authority (WHEDA) today circulated a memorandum regarding the 30 percent test to be utilized by owners of projects that have received an award of Section 1602 funds. Recipients of funds awarded under the Recovery Act Section 1602 low-income housing tax credit exchange program that have not expended 100 percent of their Section 1602 funds by December 31, 2010 are to demonstrate that they have paid or incurred at least 30 percent of the project’s total adjusted basis in land and depreciable property by December 31. WHEDA requires a certification be completed by a third party tax or accounting professional in a form provided by the Treasury Department; the last date WHEDA will accept these certifications is January 5, 2011. If a project does not meet this 30 percent test as of December 31, all Section 1602 funds that have not been drawn down by that date to pay for eligible costs incurred will be forfeited by the owner

Join Novogradac & Company at the 17th Annual Affordable Housing Tax Credit Conference, Sep. 30-Oct. 1, in San Francisco, Calif. to discuss the Recovery Act and other LIHTC hot topics.

Questions about meeting the 30 percent test and the documentation requirements in Wisconsin can be directed to your Novogradac & Company representative or Stacey Stewart at (330) 365-5405.

IRS INVITES PUBLIC COMMENT ON LIHTC REGULATIONS

WASHINGTON, D.C. - August 30, 2010

The Internal Revenue Service (IRS) today invited public comment regarding PS-19-92 (Final) Carryover Allocations and Other Rules Relating to the Low-Income Housing Credit, TD 9420 - Section 42 Utility Allowance Regulations Update. The regulations provide the IRS the information it needs to ensure that low-income housing tax credits (LIHTCs) are being properly allocated. No changes have been proposed at this time. Written comments should be received on or before October 29, 2010.

PERAB SENDS REPORT ON TAX REFORM OPTIONS TO PRESIDENT

WASHINGTON, D.C. - August 27, 2010

The President’s Economic Recovery Advisory Board (PERAB) today voted unanimously to present the tax reform subcommittee’s “Report on Tax Reform Options: Simplification, Compliance and Corporate Taxation,” to President Barack Obama. The report discusses the pros and cons of a spectrum of reform ideas relating to tax reform, without taking a position on those ideas. There are a number of proposals included in the report, including a discussion of reducing or eliminating tax expenditures. In the tax expenditure discussion, the tax reform subcommittee specifically addresses the low-income housing tax credit. It is important to note that presenting the report to the President does not mean the PERAB supports any of the proposals included in the document.

To hear this report discussed in detail, tune in to the Tax Credit Tuesday podcast on August 31.

The range of proposals being considered related to tax expenditures are discussed in the Washington Wire in the September issue of the Novogradac Journal of Tax Credits, which will be available for download next week.

This topic will also be examined by industry experts at the 17th Annual Affordable Housing Tax Credit Conference, Sep. 30-Oct. 1, in San Francisco, Calif.

OTHER PROGRAM OPTION ADDED TO RENT & INCOME LIMIT CALCULATOR

SAN FRANCISCO, Calif. - August 23, 2010

Novogradac & Company LLP's Rent & Income Limit Calculator© has been updated to include an "Other Program" option. The Rent & Income Limit Calculator© calculates rent and income limits based on U.S. Department of Housing and Urban Development's (HUD) 2010 rent and income limit data. The Other Program option allows users to calculate income and rent limits based on the HUD published area median income (AMI), 30 percent, 50 percent, or 80 percent income limits—and to customize imputed persons per bedroom for rent calculations.

The Rent & Income Limit Calculator© is available with the compliments of Novogradac & Company LLP.

To learn what the 2010 rent and income limits mean for your property, register for Novogradac & Company’s Property Compliance Workshop on September 30 - October 1 in San Francisco, Calif.

HUD FINAL RULE PROHIBITS REQUIRED ESCROWING OF TAX CREDIT EQUITY

WASHINGTON, D.C. - August 23, 2010

The U.S. Department of Housing and Urban Development (HUD) released its final rule today on the prohibition of the escrowing of tax credit equity. The final rule, in accordance with a provision in the Housing and Economic Recovery Act of 2008, bars HUD from requiring the escrowing of equity from the sales of low-income housing tax credits (LIHTCs), historic tax credits (HTCs) and new markets tax credits (NMTCs) for HUD-insured mortgages. Mortgagors will now be able to deposit cash deemed by the Federal Housing Commissioner to be sufficient, when added to the proceeds of the insured mortgage, to assure completion of the project and to pay the initial service charge, carrying charges, and legal and organizational expenses incident to the construction of the project. Additionally, the tax credit equity need not be fully disbursed before the disbursement of mortgage proceeds.

Tune in to tomorrow’s Tax Credit Tuesday podcast to learn more.

INDIANA SECTION 1602 GRANTEES REMINDED OF 30 PERCENT TEST DEADLINE

INDIANAPOLIS, Ind. - August 16, 2010

The Indiana Housing and Community Development Authority (IHCDA) last week released forms for the 30 percent test to be utilized by owners of projects that have received an award of Section 1602 funds. IHCDA also announced the 30 percent test will be due on January 5, 2011.  IHCDA requires recipients of funds awarded under the Recovery Act Section 1602 low-income housing tax credit exchange program that have not expended 100 percent of their Section 1602 funds by December 31, 2010 to demonstrate that they have paid or incurred at least 30 percent of the project’s total adjusted basis in land and depreciable property by December 31. If a project does not meet this 30 percent test as of December 31, all Section 1602 funds that have not been drawn down by that date to pay for eligible costs incurred will be forfeited by the owner.

Join Novogradac & Company at the 17th Annual Affordable Housing Tax Credit Conference, Sep. 30-Oct. 1, in San Francisco, Calif. to discuss the Recovery Act and other LIHTC hot topics.

Questions about meeting the 30 percent test and the documentation requirements in different states can be directed your Novogradac & Company representative or to CPAs@novoco.com.

IRS INVITES COMMENTS ON FORM 8877

WASHINGTON, D.C. - August 12, 2010

The Internal Revenue Service (IRS) is soliciting comments concerning Form 8877, Request for Waiver of Annual Income Recertification Requirement for the Low-Income Housing Credit, as part of an ongoing information collection. No changes to the form have been proposed at this time. Written comments should be received on or before October 12.

SECTION 1602 GRANTEES REMINDED OF 30 PERCENT TEST DEADLINE

SACRAMENTO, Calif. - August 5, 2010

The California Tax Credit Allocation Committee (TCAC) announced today that it is preparing forms for the 30 percent test to be utilized by owners of projects that have received an award of Section 1602 funds. TCAC requires that recipients of funds awarded under the Recovery Act Section 1602 low-income housing tax credit exchange program that have not expended 100 percent of their Section 1602 funds by December 31, 2010 to use these forms to demonstrate that they have paid or incurred at least 30 percent of the project’s total adjusted basis in land and depreciable property by December 31. If a project does not meet this 30 percent test as of December 31, all Section 1602 funds that have not been drawn down by that date to pay for eligible costs incurred will be forfeited by the owner.

Join Novogradac & Company at the 17th Annual Affordable Housing Tax Credit Conference, Sep. 30-Oct. 1, in San Francisco, Calif. to discuss the Recovery Act and other LIHTC hot topics.

Questions about meeting the 30 percent test and the documentation requirements in different states can be directed to Chris Key, CPA, at (678) 867-2333.

IRS INVITES GUIDANCE ON SEVERAL LIHTC REGULATIONS

WASHINGTON, D.C. - July 6, 2010

The Internal Revenue Service (IRS) today invited comments concerning existing final regulations, Treasury Decision (T.D.) 8430, Procedure for Monitoring Compliance With Low-Income Housing Credit Requirements; T.D. 8521, Rules To Carry Out the Purposes of Section 42 and for Correcting Administrative Errors and Omissions; and T.D. 8859, Compliance Monitoring and Miscellaneous Issues Relating to the Low-Income Housing Credit. No changes are proposed to the regulations at this time; the comment request was issued as part of the Treasury Department’s continuing effort to reduce paperwork and respondent burden as required by the Paperwork Reduction Act of 1995. Written comments should be received on or before September 7, 2010 to be assured of consideration.

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