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An online catalog of state and local affordable housing preservation policies, from the National Housing Trust and Novogradac & Co LLP

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GAO Suggests IRS, HUD Jointly Administer LIHTC Program

WASHINGTON – July 24, 2015

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A report by the U.S. Government Accountability Office (GAO) says that Congress should consider designating the Department of Housing and Urban Development (HUD) as a joint administrator with the Internal Revenue Service (IRS) of the Low-Income Housing Tax Credit (LIHTC) program. The GAO suggests HUD should be given responsibility for regular monitoring of housing finance agencies and analyzing the effectiveness of the program.

The report, conducted at the request of Senate Judiciary Committee Chairman Charles Grassley, R-Iowa, cites “minimal” oversight by the IRS of the LIHTC and points out that the IRS already shares joint administration duties with other agencies both the New Markets Tax Credit (NMTC) program and the Historic Tax Credit (HTC) program.

Read the Notes from Novogradac blog for more information.

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Senate Finance Committee Announces Tax Extenders Markup

WASHINGTON – July 17, 2015

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Senate Finance Committee Chairman Orrin Hatch, R-Utah, and Ranking Member Ron Wyden, D-Ore., today announced that the committee will mark up a tax extenders bill Tuesday. The chairman's mark of the bill included extending the following provisions through the end of 2016: the minimum applicable percent of the 9 percent low-income housing tax credit (LIHTC) (for allocations made before Jan. 1, 2017); the new markets tax credit (NMTC) at $3.5 billion annually; the Section 45L energy efficient home credit; the Section 179D energy-efficient commercial buildings deduction; and the ability to claim the renewable energy investment tax credit (ITC) in lieu of the production tax credit (PTC). A minimum 4 percent applicable percentage for LIHTCs used to finance the acquisition of property is not included, but could be added in a modified chairman's mark expected for release Tuesday. Estimated revenue effects of the chairman's mark can be found here and a summary of the provisions can be found here.

Tune in to the July 21 Tax Credit Tuesday podcast for more information.

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Bills Introduced to Provide NMTCs, LIHTCs to Disaster-Stricken Communities

WASHINGTON – July 17, 2015

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Bipartisan legislation was introduced in the House and Senate Thursday to provide tax relief to communities affected by natural disasters from 2012 to 2015, in the form of increased availability of new markets tax credits (NMTCs) and low-income housing tax credits (LIHTCs). The National Disaster Tax Relief Act would provide an increased LIHTC allocation in qualifying disaster areas equal to $8 per person or 50 percent of a state’s annual LIHTC ceiling, whichever is higher. In addition, community development entities (CDEs) serving disaster areas would be eligible to compete for an additional $500 million NMTC allocation for each year from 2012 through 2015. S. 1795 and H.R. 3110 will be posted on www.novoco.com when they are available.

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Senate Tax Reform Working Group Report Estimates LIHTC Expenditures

WASHINGTON – July 8, 2015

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The Senate Finance Committee today released reports from its five tax reform working groups. The Community Development & Infrastructure Bipartisan Tax Working Group Report included an overview of the Low-Income Housing Tax Credit (LIHTC) program and estimated that LIHTC tax expenditures for fiscal years 2014-2018 will be $40.5 billion. The report made no recommendations regarding the LIHTC.

Tune in to the July 14 Tax Credit Tuesday podcast for more information.

HUD Issues Final Rule on Affirmatively Furthering Fair Housing

WASHINGTON – July 8, 2015

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The U.S. Department of Housing and Urban Development (HUD) today announced a final rule on affirmatively furthering fair housing. The final rule clarifies existing fair housing obligations for HUD program participants to incorporate into their planning processes. HUD said it will provide open data to program participants and the public on patterns of integration and segregation, racially and ethnically concentrated areas of poverty, disproportionate housing needs and disparities in access to opportunity.

Tune in to the July 14 episode of the Tax Credit Tuesday podcast for more information.

Supreme Court Issues ‘Disparate Impact’ Ruling

WASHINGTON – June 25, 2015

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The U.S. Supreme Court today issued its decision in the case Inclusive Community Properties Inc. vs. Texas Department of Community Affairs. The 5-4 decision allows complaints to be made under the Fair Housing Act based on “disparate impact,” which is when a policy that appears to be neutral has a discriminatory effect on a protected class.

Tune in to the June 30 episode of the Tax Credit Tuesday podcast for more information and visit the Notes from Novogradac blog for analysis.

Harvard Report Highlights Importance of LIHTC

CAMBRIDGE, Mass. – June 24, 2015

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The Joint Center for Housing Studies of Harvard University (JCHS) recently released its The State of the Nation’s Housing 2015 report. The report provides an annual assessment of the housing market, demographic trends within the market and challenges faced by U.S. households. The report found that, as the primary source of financing for the construction and preservation of affordable housing, the low-income housing tax credit (LIHTC) faces increasing pressure that is exacerbated by a lack of other federal funding caused by cuts to the U.S. Department of Housing and Urban Development (HUD) HOME funds. The report also calls for the LIHTC program to be expanded.

Tune in to the June 30 Tax Credit Tuesday podcast to learn more about the report.

North Dakota Extends, Expands Housing Incentive Fund

BISMARCK, N.D. – June 19, 2015

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North Dakota Gov. Jack Dalrymple announced this week that he has signed a bill extending the state Housing Incentive Fund (HIF) through June 30, 2017  and increasing the total amount of credits allowed to eligible HIF contributors. H.B. 1014 increases the program cap from $20 million through tax year 2014 to $30 million for the first two taxable years beginning after Dec. 31, 2014. The new law also sets the origination fee for HIF grant recipients at no more than 5 percent of the award.

HUD Issues RAD Guidance

WASHINGTON – June 17, 2015

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The U.S. Department of Housing and Urban Development (HUD) released new guidance this week for public housing authorities (PHAs) and property owners and managers participating in HUD’s Rental Assistance Demonstration (RAD) program. The guidance represents clarifications and changes since the program’s launch and incorporates key changes authorized by Congress, including the expansion of the program cap from 60,000 to 185,000 units. It revises which properties are eligible to participate, the rights of residents and the role of PHAs in entities formed as part of a RAD conversion.

Tune in to the June 23 episode of the Tax Credit Tuesday podcast for more information on the guidance.

Tennessee Housing Agency Issues LIHTC Report

NASHVILLE, Tenn. – June 11, 2015

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The Tennessee Housing Development Agency (THDA) yesterday issued a report, “Tennessee’s Low Income Housing Tax Credit Program,” which examines the 28-year history of the federal Low-Income Housing Tax Credit (LIHTC) program in Tennessee and notes the areas of greatest opportunity in the near future. The report states that nearly $2.5 billion has been allocated for LIHTC construction in the state since 1987, resulting in 940 properties representing 46,000 units.

Bipartisan Legislation Would Extend LIHTC Eligibility to Homeless Students

WASHINGTON – May 26, 2015

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Sens. Al Franken, D-Minn., and Rob Portman, R-Ohio, last week introduced a bill that would extend eligibility to live in low-income housing tax credit (LIHTC) units to homeless or previously homeless full-time students who would otherwise qualify to live in LIHTC units. The Housing for Homeless Students Act of 2015 would exempt individuals from the student rule if they were homeless children or youth within seven years of moving into the LIHTC unit. The bill would also exempt veterans from the student rule if they are or have been homeless within five years of moving in to the LIHTC unit. Sens. Franken and Portman introduced similar legislation last year.

IRS: Tenant Income Increase Insufficient Cause to Terminate Lease

NORWALK, CONN. – May 7, 2015

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The Internal Revenue Service (IRS) today released a Chief Counsel Advice memorandum stating that "not renewing a tenant's lease in this situation does not mean that the building is not a qualified low-income buliding under § 42(c)(2). However, unless good cause exists to not renew the lease, an owner is required to continue the tenancy of a tenant in a low-income unit who upon initial occupancy satisifed the applicable income limitation elected under § 42(g)(1)."

Tune in to the May 12 Tax Credit Tuesday podcast to learn more.

Senate Bill Introduced to Make Permanent LIHTC Floor

WASHINGTON – May 5, 2015

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Sens. Maria Cantwell, D-Wash., and Pat Roberts, R-Kan., today introduced a bill that would create a permanent floor for the low-income housing tax credit (LIHTC) . The bill text is identical to H.R. 1142, which was introduced by Reps. Pat Tiberi, R-Ohio, and Richard Neal, D-Mass., Feb. 26. The Improving the Low-Income Housing Tax Credit Rate Act (S. 1193) would establish a minimum 9 percent LIHTC rate for new construction rental property and a minimum 4 percent rate for acquisition LIHTC. The bill would apply to buildings placed in service after Dec. 31, 2014.

Tune in to the May 12 Tax Credit Tuesday podcast to learn more about the bill.

HUD to Implement FY 2015 Income Limits April 20

WASHINGTON – April 14, 2015

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Low-income housing tax credit (LIHTC) property owners and managers are reminded that on Monday, in accordance with Rev. Ruling 94-57, the 45 day grace period for implementing the U.S. Department of Housing and Urban Development (HUD) fiscal year (FY) 2015 income limits for properties funded by the LIHTC or tax-exempt bonds will expire. Multifamily tax subsidy projects (MTSPs) must use FY 2015 income limits to determine qualification levels and to set maximum rental rates by Monday to remain in compliance.

The Novogradac Rent & Income Limit Calculator© has been updated in beta version to include the FY 2015 rent and income limit data, which was released March 6. The Rent & Income Limit Calculator© will calculate IRC Section 42(i)(3)(A) LIHTC rent and income limits for every county and for every metropolitan statistical area (MSA) in the United States.

Bill Introduced to Expand HTF and LIHTC

WASHINGTON – April 6, 2015

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Rep. Keith Ellison, D-Minn., last month reintroduced a bill to expand funding for the National Housing Trust Fund and the low-income housing tax credit (LIHTC). The Common Sense Housing Investment Act of 2015 (H.R. 1662) would increase the per-capita allocation from $2.30 to $2.70. The legislation would also provide a 50 percent eligible basis boost for rental housing targeted to extremely low-income households. The amendments would be effective for LIHTC allocations made in calendar year 2015 or later.

H.R. 1662 would also expand Section 8 rental assistance and the public housing capital fund.

HUD Proposes Expanded Protections for Domestic Violence Survivors

WASHINGTON – March 25, 2015

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The U.S. Department of Housing and Urban Development (HUD) yesterday issued a new proposed rule to implement protections included in the Violence Against Women Reauthorization Act of 2013 (VAWA 2013). The rule would amend HUD’s regulations to fully protect against housing discrimination all of its residents who are survivors of domestic and dating violence, stalking and sexual assault—regardless of sex, gender identity, sexual orientation or age. The VAWA 2013 reauthorization expands coverage to include nearly all HUD initiatives and other programs, including the Low-Income Housing Tax Credit (LIHTC) program. Public comment can be made about the proposed rule for 60 days after it’s published in the Federal Register.

Tune into the March 31 episode of the Tax Credit Tuesday podcast for more information.

IRS Releases Population Estimates for 2015

WASHINGTON – March 23, 2015

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The Internal Revenue Service (IRS) today released Notice 2015-23, which lists its  2015 Calendar Year Resident Population Figures. These figures are used to determine states’ 2015 low-income housing tax credit (LIHTC) ceiling and tax-exempt private activity bond caps. Under Rev. Proc. 2014-61, each state’s LIHTC ceiling in 2015 is the greater of $2.30 multiplied by the state population or $2.68 million; a state’s tax-exempt bond volume cap will be the greater of $100 multiplied by the state population or $301,515,000.

Senate Tax Reform Working Group Seeks Comments

WASHINGTON – March 11, 2015

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The Senate Finance Committee today announced that its tax reform working groups are seeking comments from the public as they work to advance tax reform efforts in the 114th Congress. The five working groups are community development and infrastructure; business income tax; individual income tax; international tax; and savings and investment. The community and infrastructure group’s jurisdiction includes the low-income housing tax credit (LIHTC), the new markets tax credit (NMTC) and the historic tax credit (HTC). The business tax reform group’s jurisdiction includes renewable energy tax credits (RETCs). Comments will be accepted through April 15.

Tune into the March 17 episode of the Tax Credit Tuesday podcast for more information.

HUD RELEASES INCOME LIMITS FOR FY 2015

WASHINGTON – March 6, 2015

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The U.S. Department of Housing and Urban Development (HUD) today released income limits for fiscal year (FY) 2015. These income limits are used to determine income eligibility for HUD’s assisted housing programs, including public housing, Section 8, Section 202 and Section 811. Income limits that are used to determine qualification levels and to set maximum rental rates for low-income housing tax credit (LIHTC) or tax-exempt bond projects, which HUD refers to as multifamily tax subsidy projects (MTSPs), are calculated and presented separately from the Section 8 income limits.

Novogradac & Company LLP is currently updating the Rent & Income Limit Calculator© to include the 2015 data. Subscribers to Novogradac & Company’s free Industry Alert service will receive an email announcement when this update has been completed.

Tune into the March 10 Tax Credit Tuesday podcast for initial information about the income limits. For in-depth analysis, register for the Novogradac 2015 HUD Rent and Income Limits and Your Tax Credit Property Webinar at 1 p.m. EDT on March 17.

Bill Introduced to Make Permanent LIHTC Floor

WASHINGTON – Feb. 26, 2015

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Reps. Pat Tiberi, R-Ohio, and Richard Neal, D-Mass., today introduced a bill that would create a permanent floor for the low-income housing tax credit (LIHTC). The bill would establish a fixed 9 percent LIHTC rate for new rental construction property and a fixed 4 percent LIHTC rate for existing property. The bill would apply to buildings placed in service after Dec. 31, 2014.  

Tune into the March 3 Tax Credit Tuesday podcast to learn more about the bill.

HUD Publishes Housing Trust Fund Interim Rule

WASHINGTON – Jan. 30, 2015

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The U.S. Department of Housing and Urban Development (HUD) today published a Federal Register notice establishing interim regulations that will govern the Housing Trust Fund (HTF) and the formula that will determine how HTF funds are distributed among eligible grantees. Each of the states and the District of Columbia are to receive a minimum allocation of $3 million. Factors that determine allocation amounts are a state’s relative shortage of rental housing available to extremely low- and very low-income families; the relative number of extremely low- and very low-income renter households living in substandard, overcrowded or unaffordable units in a particular state; and construction cost adjustment factors.

Major regulation provisions include siting and neighborhood standards; income determinations; eligible costs and activities; project requirements; tenant and homeowner qualification requirements; other federal requirements; program administration regulations; and quality control provisions.

The HTF was established under the Housing and Economic Recovery Act of 2008 (HERA) to provide grants to state governments that would increase and preserve the supply of rental housing for extremely low- and very-low-income households and to increase homeownership for extremely low- and very-low-income households. HUD said it intends to open the interim rule for public comments once funding is available and the grantees gain experience administering the HTF program.

Tune into the Feb. 3 episode of the Tax Credit Tuesday podcast for more information.

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