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Obama Signs 2014 Tax Extenders Bill

WASHINGTON – Dec. 19, 2014

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President Barack Obama today signed “The Tax Increase Prevention Act of 2014” (H.R. 5571), a tax incentives bill that retroactively extends through the end of 2014 most temporary tax provisions that expired at the end of 2013. The one-year extension act passed the Senate earlier this week by a vote of 76-16. The House passed the legislation 378-46 on Dec. 3.

The bill includes several provisions of interest to the tax credit community. They include an extension of the 9 percent floor for low-income housing tax credit (LIHTC) allocations made for non-federally subsidized buildings before Jan. 1, 2015; an extension through the end of this year for the new markets tax credit (NMTC); and an extension of the production tax credit (PTC) for wind and certain other renewable energy sources for facilities that begin construction before the end of this year. The legislation also includes an extension of 50 percent bonus depreciation to property acquired and placed in service during 2014 (and 2015 for certain properties with a longer production period).

Tune into the Dec. 23 episode of the Tax Credit Tuesday podcast for more information.

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Senate Approves 2014 Tax Extenders Bill

WASHINGTON – Dec. 17, 2014

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The U.S. Senate on Tuesday night passed “The Tax Increase Prevention Act of 2014” (H.R. 5771), a tax incentives bill that retroactively extends for one year–through the end of 2014–most temporary tax provisions that expired at the end of 2013. The bill was passed with a vote of 76-16 and will become law when signed by President Barack Obama. The House passed the legislation 378-46 on Dec. 3.

The bill includes several provisions of interest to the tax credit community, including an extension of the 9 percent floor for low-income housing tax credit (LIHTC) allocations made for non-federally subsidized buildings before Jan. 1, 2015; an extension through the end of 2014 for the new markets tax credit (NMTC); and an extension of the production tax credit (PTC) for wind and certain other renewable energy sources for facilities that begin construction before the end of 2014. The legislation also includes an extension of 50 percent bonus depreciation to property acquired and placed in service during 2014 (and 2015 for certain properties with a longer production period).

Tune into the Dec. 23 episode of the Tax Credit Tuesday podcast for more information.

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Camp Introduces Tax Reform Legislation; Senate Finance Committee GOP Staff Releases Tax Reform Report

WASHINGTON – Dec. 11, 2014

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Today House Ways and Means Committee chairman Rep. Dave Camp, R-Mich., officially introduced H.R. 1, the Tax Reform Act of 2014. Camp’s legislation proposes formalizing the tax reform discussion draft released last February. It retains the low-income housing tax credit (LIHTC), doesn’t mention the new markets tax credit (NMTC) and proposes the repeal of the historic tax credit (HTC) and renewable energy tax credits (RETCs). Camp called for the legislation to “spur further action” during the 114th Congress, which begins in January.

Meanwhile, the U.S. Senate Finance Committee Republican staff today released a report titled “Comprehensive Tax Reform for 2015 and Beyond,” outlining issues that policymakers will face if they attempt comprehensive tax reform in the upcoming Congress. While LIHTCs, NMTCs, HTCs and RETCs are not specifically mentioned, the report calls for “permanence and certainty,” and indicates that some tax credits should be enhanced and made permanent.  

Tune into the Dec. 16 episode of the Tax Credit Tuesday podcast to learn more.

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FHFA Authorizes Funding for Housing Trust Fund, Capital Magnet Fund

WASHINGTON – Dec. 11, 2014

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The Federal Housing Finance Agency (FHFA) today sent letters to Fannie Mae and Freddie Mac, directing them to begin setting aside and allocating funds to the National Housing Trust Fund (NHTF) and the Capital Magnet Fund (CMF). Contributions to the NHTF and CMF were suspended since 2008, when Fannie Mae and Freddie Mac, the intended funding sources under the Housing and Economic Recovery Act of 2008 (HERA), were placed into conservatorship. The FHFA released an interim final rule to implement a statutory prohibition against the government-sponsored enterprises passing the cost of allocations through to the originators of loans they purchase or securitize.

Tune into the Dec. 16 episode of the Tax Credit Tuesday podcast to learn more.

HUD Delays Income Limits Release

WASHINGTON – Dec. 3, 2014

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The U.S. Department of Housing and Urban Development (HUD) today announced that the publication of its fiscal year (FY) 2015 income limits will be delayed and will occur following the publication of 2015 poverty guidelines issued by the Department of Health and Human Services (HHS). The income limits are used to determine income eligibility for HUD’s assisted housing programs, including public housing, Section 8, Section 202 and Section 811. Instead of being issued this week as originally expected, HUD anticipates that the FY 2015 income limits will be published in February 2015.

The delay is related to a change in the definition of an “extremely low-income” household, which is mainly used for setting admissions targets in the Housing Choice Voucher program.  The change was made by the 2014 Consolidated Appropriations Act and extremely low-income household is now defined as the greater of the Department of Health and Human Services (HHS) poverty guidelines or 30 percent of area median income (AMI).

Tune into the Dec. 9 episode of the Tax Credit Tuesday podcast to learn more.

Stakeholders Urge Congress to Extend Tax Credits

WASHINGTON – Nov. 18, 2014

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Hundreds of tax credit advocates have recently sent sign-on letters to Congress, urging lawmakers to extend expired or expiring tax credits during the lame-duck session. A letter from Affordable Rental Housing ACTION (A Call to Invest in Our Neighborhoods) urged Congress to extend the 9 percent low-income housing tax credit (LIHTC) minimum rate for new construction and substantial rehabilitation and the 4 percent LIHTC minimum for acquisition of affordable housing. The letter called for the floor rates to be made permanent, but said an extension for at least two years would strengthen the credit at virtually no cost to taxpayers. It featured signatures from a coalition of more than 900 national, state and local stakeholders.

Meanwhile, more than 1,500 organizations, including businesses, nonprofits and investors, signed a letter from the New Markets Tax Credit Coalition, urging Congress to extend the new markets tax credit (NMTC). The coalition letter argued that the economic activity spurred by NMTC investments has generated enough tax revenue to cover the cost of the program.

In sign-on letters addressed to the House of Representatives and the Senate, more than 500 organizations asked Congress to extend seamlessly, enhance or make permanent the expired and expiring tax provisions. That letter said that failure to extend the provisions would effectively act as a tax increase and would inject instability and uncertainty into the economy.

Tune into the Nov. 25 episode of the Tax Credit Tuesday podcast to learn more.

IRS Publishes LIHTC, Bond Caps for 2015

WASHINGTON – Oct. 30, 2014

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The Internal Revenue Service (IRS) today announced in Revenue Procedure 2014-61 the inflation-adjusted low-income housing tax credit (LIHTC) and private activity bond caps for 2015. For calendar year 2015, the amount used under §42(h)(3)(C)(ii) to calculate the state housing credit ceiling for the LIHTC is the greater of $2.30 multiplied by the state population—the same as 2014—or $2,680,000, up from $2,635,000. The amount used under §146(d)(1) to calculate the state ceiling for the volume cap for private activity bonds in 2015 is the greater of $100 multiplied by the state population—the same as 2014—or $301,515,000, up from $296,825,000.

Tune into the Nov. 4 episode of the Tax Credit Tuesday podcast to learn more.

Bill Enacts LIHTC for District of Columbia

SACRAMENTO – Oct. 16, 2014

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The Fiscal Year 2015 Budget Support Congressional Review Emergency Act of 2014, which enacts and amends provisions of law necessary to support the District of Columbia’s fiscal year 2015 budget, became effective last week. Among other things, the act implements a low-income housing tax credit (LIHTC) for the District of Columbia. The Department of Housing and Community Development will make available $1 million in LIHTCs in 2015.

Tune in to the Oct. 21 Tax Credit Tuesday podcast to learn more about the District of Columbia’s new LIHTC.

California Releases Affordable Housing Development Cost Study

SACRAMENTO – Oct. 13, 2014

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A study measuring the factors that influence the cost of building affordable rental housing in California was released today by the California Department of Housing and Community Development, the California Tax Credit Allocation Committee, the California Housing Finance Agency and the California Debt Limit Allocation Committee. Affordable Housing Cost Study: Analysis of the Factors that Influence the Cost of Building Multi-Family Affordable Housing in California found that the factors influencing costs are multifaceted, with no single factor explaining all or even most of the cost of developing affordable housing. As such, the authors conclude that any approach to lowering costs must look across multiple factors, rather than focusing on a single issue.

Tune into the Oct. 21 Tax Credit Tuesday podcast to learn more about the report and what it means for the affordable housing community in California.

HUD Releases Final 2015 FMRs

WASHINGTON – Oct. 2, 2014

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In a notice in tomorrow’s Federal Register, the U.S. Department of Housing and Urban Development (HUD) will publish final fiscal year (FY) 2015 fair market rents (FMRs). The final FY 2015 FMRs took effect Oct. 1. HUD uses FMRs to determine payment standard amounts for the Housing Choice Voucher program, to determine initial renewal rents for some expiring project-based Section 8 contracts and to determine initial rents for housing assistance payments (HAP) contracts in the Moderate Rehabilitation Single Room Occupancy (SRO) program.

HUD Designates 2015 DDAs, QCTs

WASHINGTON – Oct. 2, 2014

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In tomorrow’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 2015 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. The 2015 metropolitan DDA designations will be the last designated for entire metropolitan areas. HUD announced previously that beginning with the 2016 DDA designations, metropolitan DDAs will use small area fair market rents (FMRs), instead of metropolitan-area FMRs, for designating metropolitan DDAs.

Tune into the Oct. 7 Tax Credit Tuesday podcast to hear more about the 2015 DDAs and QCTs. And join other LIHTC professionals at the Novogradac Affordable Housing Conference in San Francisco on Oct. 9 and 10 to discuss the latest news in LIHTC development.

HUD Issues Subsidy Layering Review Guidance

WASHINGTON – Sept. 25, 2014

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In a notice in tomorrow’s Federal Register, the U.S. Department of Housing and Urban Development (HUD) will issue guidelines for conducting subsidy layering reviews for Section 8 project-based voucher housing assistance payment contracts and mixed-finance developments, including those with or without low-income housing tax credits (LIHTCs). Requirements in the notice do not supersede subsidy layering requirements of other federal programs.

Tune in to the Oct. 7 Tax Credit Tuesday podcast to learn more about what the guidelines mean for LIHTC developments.

IRS Releases Updated LIHTC Audit Technique Guide

WASHINGTON – Sept. 18, 2014

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The Internal Revenue Service (IRS) today released its updated audit technique guide (ATG) for the Low-Income Housing Tax Credit (LIHTC) program. The ATG provides guidance for IRS examiners to audit owners of LIHTC properties. It was last updated in 1999. A draft of the guide was released for public comment last December and the IRS accepted comments until the end of March. The revised guide includes, among other changes, an expanded explanation of documents to request from the taxpayer during pre-contact analysis; a more developed definition of “residential rental property;” and a new section on emergency housing relief. The IRS provided an overview of the updates in LIHC Newsletter #56.

Tune in to the Sept. 23 Tax Credit Tuesday podcast to learn more about the changes and what they mean for the LIHTC community. The revised ATG will also be discussed in detail at the Novogradac Affordable Housing Conference, Oct. 9 and 10 in San Francisco.

IRS Distributes Unused 2014 LIHTC Allocation

WASHINGTON – Sept. 15, 2014

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The Internal Revenue Service (IRS) today published the amounts of unused low-income housing tax credit (LIHTC) carryovers for calendar year 2014 that were allocated to 35 qualified states and Puerto Rico. Revenue Procedure 2014-52 details how $2.59 million of unused LIHTCs were divided among the recipients. California received the largest allocation, $364,756 in LIHTCs.

Comment Invited on CRA Questions and Answers

WASHINGTON – Sept. 8, 2014

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The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency today invited public comment regarding proposed revisions to the Interagency Questions and Answers Regarding Community Reinvestment. The document provides additional guidance to financial institutions and the public on the agencies’ regulations that implement the Community Reinvestment Act (CRA). Among other things, the proposed new and revised CRA questions and answers address community development-related issues by clarifying guidance on economic development; providing examples of community development loans and activities that are considered to revitalize or stabilize an underserved nonmetropolitan middle-income geography; and clarifying how community development services are evaluated.  

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