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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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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.

 

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Enterprise Recommends Doubling LIHTC Allocations, Making NMTC Permanent

COLUMBIA, Md. – Feb. 4, 2016

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Enterprise Community Partners Inc., a national nonprofit organization, today proposed several affordable housing and economic development policies to strengthen communities in, “An Investment Opportunity: A Bold New Vision for Housing Policy in the U.S.” The proposals include gradually doubling annual allocations of the low-income housing tax credit (LIHTCs), expanding funding for the Section 8 program, promoting mixed-income developments and making permanent and significantly expanding the new markets tax credit (NMTC). Enterprise also recommended creating a new federal tax credit for private investments into community development financial institutions (CDFIs) and other community investment entities.

 

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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.

 

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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.

 

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.

Chairman Brady Releases Tax Extenders Proposal

WASHINGTON – Dec. 8, 2015

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House Ways and Means Committee Chairman Kevin Brady, R-Texas, yesterday proposed an amendment to the Senate amendment to H.R. 34 that would extend through 2016 several temporary tax provisions that expired at the end of calendar year 2014, also known as the “tax extenders.”

 The bill would:

  • extend the 9 percent minimum credit rate for low-income housing tax credit (LIHTC) allocations made for non-federally subsidized new buildings before 2017;
  • extend through the end of 2016 the military housing allowance exclusion for determining LIHTC tenant eligibility;
  • authorize the new markets tax credit (NMTC) at $3.5 billion annually for 2015 and 2016;
  • extend and modify bonus depreciation for property acquired and placed in service during 2015 or 2016;
  • extend the energy-efficient credit for new homes through 2016;
  • extend the energy-efficient commercial buildings deduction through 2016;
  • and extend the renewable energy production tax credit (PTC) for wind and certain other energy facilities that commence construction by the end of 2016.

The legislation includes technical changes to the partnership audit provision of the Bipartisan Budget Act of 2015, additional tax policy changes and reforms to the IRS. A section-by-section summary can be found here.

Learn more about the extenders proposal on the Notes from Novogradac blog.

 

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.

 

 

California to Discuss State LIHTC Over-Allocation

SACRAMENTO, Calif. – Nov. 19, 2015

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California State Treasurer John Chiang yesterday invited discussion on the over-allocation of California state low-income housing tax credits (LIHTCs). If affordable rental housing developments qualify for more state credits than are available for a particular year, the California Tax Credit Allocation Committee (TCAC) draws state credits from the next year’s allocation round. Treasurer Chiang said the growing amount of state LIHTCs TCAC forward commits is becoming unsustainable. TCAC forward committed $10 million of 2015 state LIHTCs last year and $30 million of 2016 state LIHTCs this year. Forums to discuss improving allocation strategies will be held Dec. 3 in Los Angeles and Dec. 8 in Oakland.

 

 

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.

 

 

IRS PUBLISHES LIHTC, BOND CAPS FOR 2016

WASHINGTON – Oct. 21, 2015

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The Internal Revenue Service (IRS) today announced in Revenue Procedure 2015-53 the inflation-adjusted low-income housing tax credit (LIHTC) and private activity bond caps for 2016. For calendar year 2016, the amount used under §42(h)(3)(C)(ii) to calculate the state LIHTC ceiling is the greater of $2.35 multiplied by the state population or $2,690,000. Those amounts are up from $2.30 and $2,680,000 in 2015. The amount used under §146(d) to calculate the state ceiling for the volume cap for private activity bonds in 2016 is the greater of $100 multiplied by the state population—the same as 2015—or $302,875,000, up from $301,515,000.

Tune into the Oct. 27 episode of the Tax Credit Tuesday podcast to learn more.

 

IRS Allocates 2015 LIHTC National Pool Credits

WASHINGTON – Oct. 12, 2015

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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 2015 that were allocated to 31 qualified states and Puerto Rico. Revenue Procedure 2015-49 details how $2.59 million of unused LIHTCs were divided among the recipients. California received the largest allocation, $388,272, in LIHTCs.

 

California Releases Proposed LIHTC Revisions

SACRAMENTO, Calif. – Oct. 9, 2015

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The California Tax Credit Allocation Committee (TCAC) today issued its final proposed revisions to regulations for its low-income housing tax credit (LIHTC) program. The original proposals were released July 16, followed by four public hearings and time for written comments. Today’s release includes responses and revisions related to that feedback. The committee will consider the revised proposals for adoption Oct. 21.

For more information, tune in to the Oct. 20 Tax Credit Tuesday podcast.

 

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.

 

California Lawmakers Pass Bills to Expand, Amend State LIHTC

SACRAMENTO – Sept. 14, 2015

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The California State Legislature last week passed two bills to make the state low-income housing tax credit (LIHTC) more effective. A.B. 35, a bill that would have increased the $70 million annual state LIHTC allocation cap by $300 million beginning in calendar year 2016, was amended so that it would only increase the allocation amount by $100 million for calendar years 2016 through 2021. S.B. 377 would allow a developer who is awarded state LIHTCs to sell the credits to an investor without admitting the investor to the ownership partnership, a practice that is commonly referred to as “certificating” the credit. It would also eliminate any sunset provision for bifurcation and would extend these provisions indefinitely. The bills now go to the governor for consideration.

 

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.

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