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CALIF. ASSEMBLY INTRODUCES BILL TO PRESERVE RDA HOUSING FUNDS

SACRAMENTO, Calif. – February 3, 2012

The California State Assembly yesterday introduced A.B. 1585, a proposal that preserves redevelopment agencies’ unencumbered Low/Mod-Income Housing funds, which local communities use to fund affordable housing development. Under Assembly Bill 1X26, which the California Supreme Court upheld in December, redevelopment agencies were eliminated February 1. A.B. 1585 is a companion bill to S.B. 654, which passed the state senate on January 31.

CALIFORNIA SENATE PASSES S.B. 654

WASHINGTON, D.C. – January 31, 2012

The California State Senate today passed S.B. 654, the proposal that preserves redevelopment agencies’ unencumbered Low/Mod-Income Housing funds, which local communities use to fund affordable housing development. Under Assembly Bill 1X26, which was upheld in December by the California Supreme Court, redevelopment agencies will be eliminated effective tomorrow, February 1. The bill, which passed the senate by a vote of 34 to 1, would preserve approximately $1.5 billion for affordable housing development. S.B. 654 will now be sent to the Assembly.

PRESIDENT PROPOSES NEW TAX CREDITS IN STATE OF THE UNION

WASHINGTON, D.C. – January 25, 2012

In last night’s State of the Union address, President Barack Obama proposed a new $6 billion Manufacturing Communities Tax Credit. The proposed tax credit would provide $2 billion per year for three years to encourage investments in communities affected by job loss caused by the closure of a military base or a major employer. The president also discussed tax reform, energy tax credits and housing.

In his Notes from Novogradac blog, Michael J. Novogradac, CPA, discusses relevant points from the address, additional information that has since been released, and what these proposals mean for programs such as the new markets tax credit, historic tax credit, low-income housing tax credit and renewable energy tax credit.

BILL INTRODUCED TO INCREASE LIHTCs FOR STATES DAMAGED BY HURRICANE IRENE

WASHINGTON, D.C. – January 18, 2012

Rep. Christopher Gibson, R-N.Y., last week introduced H.R. 3769, the Irene and Lee Tax Relief Storm Recovery Act. The act would increase the amount of low-income housing tax credits (LIHTCs) that may be allocated in states damaged in 2011 by Hurricane Irene or Tropical Storm Lee. Regions included in the Irene-Lee disaster area, which the bill defines as each county covered by a qualifying natural disaster declaration and contiguous counties, would also be designated as difficult development areas under the bill. H.R. 3769 was referred to the Ways and Means Committee.

RENTAL POLICY WORKING GROUP RELEASES REPORT

WASHINGTON, D.C. – January 3, 2012

The Rental Policy Working Group (RPWG) on December 31 released its administrative proposals for the alignment of federal affordable rental housing programs. The report, called “Federal Rental Alignment Administrative Proposals” proposes ways to reduce the cost and burden of various affordable housing programs operated by the U.S. Department of Agriculture, U.S. Department of Housing and Urban Development, U.S. Department of the Treasury and others. The suggestions include aligning physical inspections, income reporting, financial reporting, energy efficiency requirements, appraisals, market study standards, subsidy layering, capital needs assessments, data sharing on owner defaults and fair housing compliance enforcement. Learn more about the Obama Administration’s ongoing rental policy alignment initiative by visiting the Rental Policy Alignment Hot Topics page.

Want to discuss the rental alignment policies with your peers? There’s still time to register for the 18th Annual Tax Credit Developers Conference, January 12-13, in Miami, Fla.

CALIF. SUPREME COURT RULES RDAS CAN BE ELIMINATED

SACRAMENTO, Calif. – December 29, 2011

The California Supreme Court today ruled to uphold Assembly Bill 1X 26 and invalidate Assembly Bill 1X 27. In its opinion in the case of California Redevelopment Association v. Matosantos, the court found that redevelopment agencies (RDAs) do not have a protected right to exist that immunizes them from statutory dissolution by the Legislature; and that RDAs and their sponsoring communities do have a protected right not to make payments to various funds benefiting schools and special districts as a condition of continued operation.

Tune in to the Tax Credit Tuesday Podcast on January 3 to hear from Michael J. Novogradac, CPA, what this ruling means for affordable housing development in California. For questions about the ruling, contact James R. Kroger, CPA, at jim.kroger@novoco.com.

IRS PROVIDES GUIDANCE ON CURRENT REFUNDINGS OF TAX-EXEMPT BONDS

WASHINGTON, D.C. – December 28, 2011

The Internal Revenue Service (IRS) today issued Notice 2012-3 to provide guidance on current refunding issues that are used to refund original tax-exempt bonds under certain disaster relief programs. The notice applies to qualified bonds under the Gulf Opportunity Zone, Midwest Disaster Area and Hurricane Ike Disaster Area programs. The IRS said that a current refunding issue that meets all requirements outlined in the notice may be issued after the specified deadline for the issuance of the original qualified bonds and be treated as an issue of qualified bonds.

IRS SUSPENDS CERTAIN REQUIREMENTS FOR IOWA LIHTC PROPERTIES

WASHINGTON, D.C. – December 21, 2011

The Internal Revenue Service (IRS) issued Notice 2012-07 to grant certain low-income housing tax credit (LIHTC) properties relief from specified Section 42 requirements to provide emergency housing relief needed as a result of the devastation caused by flooding in Iowa during the period of May 25, 2011 to August 1, 2011. The IRS said it will suspend temporarily income limitation and non-transient requirements for LIHTC properties that have received approval from the Iowa Finance Authority to rent vacant units to individuals displaced by natural disasters. Other rules and requirements of Section 42 will continue to apply during the temporary housing period.

LEGISLATION INTRODUCED TO MAKE FIXED LIHTC FLOOR PERMANENT

WASHINGTON, D.C. – December 14, 2011

A bipartisan group of lawmakers in the House and Senate today introduced legislation to make permanent the 9 percent tax credit percentage floor for the low-income housing tax credit (LIHTC) as originally but temporarily authorized by the Housing and Economic Recovery Act of 2008 (HERA). The legislation would also extend the same policy to 4 percent LIHTCs for acquisition (but not 4 percent LIHTCs generated by tax-exempt bonds). The House bill, H.R. 3661, is cosponsored by Reps. Pat Tiberi, R-Ohio; Richard Neal, D-Mass.; Vern Buchanan, R-Fla.; Jim Gerlach, R-Pa.; Lee Terry, R-Neb.; Charles Rangel, D-Mass.; Bill Pascrell, Jr., D-N.J.; Joseph Crowley, D-N.Y.; and Emanuel Cleaver, D-Mo. The Senate bill, S. 1989, is cosponsored by Sens. Maria Cantwell, D-Wash.; Olympia Snowe, R-Maine; Jeff Bingaman, D-N.M.; John Kerry, D-Mass.; Bill Nelson, D-Fla.; Robert Menendez, D-N.J., Ben Cardin, D-Md.; Bernie Sanders, I-Vt.; Mike Crapo, R-Idaho; Scott Brown, R-Mass.; and Susan Collins, R-Maine.

Join Novogradac & Company for the 18th Annual Tax Credit Developers Conference to hear about the bill’s provisions and what they will mean for the affordable housing community. The conference will be held on January 12-13, 2012 in Miami, Fla. and there’s still time to register.

FINAL 2012 RENT & INCOME LIMIT CALCULATOR© POSTED

SAN FRANCISCO, Calif. – December 14, 2011

Novogradac & Company LLP has released the final version of the Rent & Income Limit Calculator© featuring the U.S. Department of Housing and Urban Development's (HUD) 2012 rent and income limit data. The Rent & Income Limit Calculator© can calculate IRC Section 42(i)(3)(A) low-income housing tax credit (LIHTC) rent and income limits for every county and for every metropolitan statistical area (MSA) in the United States. The calculator is available online at www.novoco.com/products/rentincome.php with the compliments of Novogradac & Company LLP.

If you have questions about the income limits, or would like to engage Novogradac & Company LLP to calculate the rent and income limits for your property, please contact Jim Kroger at jim.kroger@novoco.com.

NCSHA UPDATES LIHTC & UNDERWRITING RECOMMENDED PRACTICES

WASHINGTON, D.C. – December 12, 2011

The National Council of State Housing Agencies (NCSHA) Board of Directors on December 5 approved updates to its low-income housing tax credit (LIHTC) and underwriting recommended practices. The document, which is a revision of NCSHA’s 2010 recommended practices, covers per cost unit limits and sponsor certification of project sources and uses of funds.

Get a more in depth report on NCSHA’s recommended practices by tuning in to the Tax Credit Tuesday podcast on December 20.

NOVOGRADAC'S RENT & INCOME LIMIT CALCULATOR UPDATED FOR 2012

WASHINGTON, D.C. – December 6, 2011

Novogradac & Company LLP is pleased to announce that the Rent & Income Limit Calculator© has been updated to include the U.S. Department of Housing and Urban Development's (HUD) 2012 rent and income limit data. The Rent & Income Limit Calculator© will calculate IRC Section 42(i)(3)(A) low-income housing tax credit (LIHTC) rent and income limits for every county and for every metropolitan statistical area (MSA) in the United States. A Beta version is available online at www.novoco.com/products/rentincome.php with the compliments of Novogradac & Company LLP.

We encourage and welcome your comments on this Beta version of the Rent & Income Calculator© at CPAs@novoco.com. A final version of the calculator will be launched in approximately one week.

If you would like to engage Novogradac & Company LLP to calculate the rent and income limits for your property, please contact Jim Kroger at jim.kroger@novoco.com.

HUD RELEASES INCOME LIMITS FOR 2012

WASHINGTON, D.C. – December 1, 2011

The U.S. Department of Housing and Urban Development (HUD) today released income limits for 2012. Click here for links to the 2012 income limits and accompanying information and tables. Under the Housing and Economic Recovery Act of 2008 (Public Law 110-289), income limits used to determine qualification levels as well as set maximum rental rates for projects funded with low-income housing tax credits (LIHTC) and projects financed with tax-exempt housing bonds - referred to by HUD as Multifamily Tax Subsidy Projects (MTSPs) - are calculated and presented separately from the Section 8 income limits.

Novogradac & Company LLP is currently updating its Rent & Income Limit Calculator© to include 2012 data. Subscribers to Novogradac & Company's free Industry Alert E-mail service will receive an e-mail announcement when the update has been completed.

For questions about the new 2012 income limits please email Jim Kroger, CPA, at jim.kroger@novoco.com or click here to learn more about Novogradac & Company's property compliance services.

IRS SAYS SALE OF STATE TAX CREDITS TAXABLE

WASHINGTON, D.C. – November 29, 2011

The Internal Revenue Service (IRS) on November 25 released Chief Counsel Advice memorandum (CCA) 201147024 stating that the sale of certain Massachusetts state tax credits, including low-income housing and historic tax credits, to a third party by the original recipient is a taxable event. Additionally, the IRS said that the original recipient has no tax cost basis in the tax credit and that the original recipient’s gain on the sale of a nonrefundable credit is capital gain. For the purchaser, basis for the tax credit is the cost of the tax credit and the purchaser must recognize apportioned gain, if the tax credit is purchased for less than its face value, when the tax credit is used to satisfy state tax liability.

To learn more about CCA 201147024 and what it could mean for industry stakeholders, please join Novogradac & Company at the Tax Credit Housing Finance Conference on December 1-2 in Las Vegas, Nev.

TREASURY EXTENDS NEW ISSUE BOND, TEMPORARY CREDIT & LIQUIDITY PROGRAMS

WASHINGTON, D.C. – November 23, 2011

The U.S. Department of the Treasury has extended the New Issue Bond Program (NIBP) through 2012 and the Temporary Credit and Liquidity Program (TCLP) through 2015, report the National Council of State Housing Agencies and the National Association of Local Housing Finance Agencies. Treasury has provided an NIBP term sheet and a TCLP term sheet and an election letter that state housing finance agencies must submit to Treasury by December 9 if they wish to continue using the NIBP. Treasury also plans to hold a webinar on the NIBP extension on November 29.

Tune in to the Tax Credit Tuesday podcast on November 29 to learn more about the NIBP and TCLP extensions.

IRS DISTRIBUTES UNUSED 2011 LIHTC ALLOCATION

WASHINGTON, D.C. – November 17, 2011

The Internal Revenue Service (IRS) today published the amounts of unused low-income housing tax credit (LIHTC) carryovers for calendar year 2011 that were allocated to 28 qualified states under Internal Revenue Code §42(h)(3)(D). Revenue Procedure 2011-57 details how nearly $3.66 million of unused LIHTCs were divided among the states in the national pool. California received the largest allocation, $570,425 in LIHTCs.

HUD DESIGNATES DDAs FOR 2012

WASHINGTON, D.C. – October 27, 2011

The U.S. Department of Housing and Urban Development (HUD) today designated difficult development areas (DDAs) for 2012 for purposes of the low-income housing tax credit (LIHTC) under Section 42 of the Internal Revenue Code (IRC). HUD makes new DDA designations annually. LIHTC projects in DDAs or QCTs are eligible for as much as 30 percent more LIHTC subsidy than projects not located in DDAs or QCTs. The designations of qualified census tracts (QCTs) under IRC Section 42 published October 6, 2009, remain in effect.

In addition to announcing the 2012 DDA designations, HUD invited public comment on whether it should use Small Area Fair Market Rents (FMRs), rather than metropolitan-area FMRs, in future designations of metropolitan DDAs. Comments on this proposal and the 2012 DDAs will be accepted through December 27, 2011.

Tune in to the Tax Credit Tuesday podcast on November 1 to hear more about the new 2012 DDAs.

Join Novogradac & Company at the Tax Credit Housing Finance Conference on December 1-2 in Las Vegas, Nev. to discuss what lies ahead for LIHTC project financing in 2012.

IRS SUSPENDS CERTAIN REQUIREMENTS FOR NEW YORK LIHTC PROPERTIES

WASHINGTON, D.C. – October 21, 2011

The Internal Revenue Service (IRS) issued Notice 2011-87 to grant certain low-income housing tax credit (LIHTC) properties relief from specified Section 42 requirements to provide emergency housing relief needed as a result of the devastation caused by Hurricane Irene in New York during the period of August 26, 2011 to September 5, 2011 or the remnants of Tropical Storm Lee during the period of September 7 to September 11, 2011. The IRS said it will temporarily suspend income limitation and non-transient requirements for LIHTC properties that have received approval from the New York State Homes and Community Renewal Agency to rent vacant units to individuals displaced by natural disasters. Other rules and requirements of Section 42 will continue to apply during the temporary housing period.

IRS INCREASES LIHTC, BOND CAPS FOR 2012

SAN FRANCISCO, CALIF. – October 20, 2011

The Internal Revenue Service (IRS) announced in Revenue Procedure 2011-52 the inflation-adjusted low-income housing tax credit (LIHTC) and private activity bond caps for 2012. For calendar year 2012, the amount used under §42(h)(3)(C)(ii) to calculate the state LIHTC is the greater of $2.20 multiplied by the state population or $2,525,000. The amount used under §146(d)(1) to calculate the state ceiling for the volume cap for private activity bonds in 2012 is the greater of $95 multiplied by the state population or $284,560,000.

COURT PLACES CASE CHALLENGING CALIF. REDEVELOPMENT AGENCIES ON CALENDAR

SAN FRANCISCO, CALIF. – October 19, 2011

The California Supreme Court today placed California Redevelopment Association. v. Matosantos on its November 10 calendar. The court had promised that it would hear the case, which challenges the validity of eliminating California redevelopment agencies, as early as possible in 2011 in order to issue an opinion by January 15, 2012.

IRS SUSPENDS CERTAIN REQUIREMENTS FOR PENNSYLVANIA LIHTC PROPERTIES

WASHINGTON, D.C. – October 14, 2011

The Internal Revenue Service (IRS) issued Notice 2011-83 to grant certain low-income housing tax credit (LIHTC) properties relief from specified Section 42 requirements to provide emergency housing relief needed as a result of the devastation caused by Hurricane Irene in Pennsylvania during the period of August 26, 2011 to August 30, 2011 or Tropical Storm Lee beginning on September 3, 2011. The IRS said it will temporarily suspend income limitation and non-transient requirements for LIHTC properties that have received approval from the Pennsylvania Housing Finance Agency to rent vacant units to individuals displaced by natural disasters. Other rules and requirements of Section 42 will continue to apply during the temporary housing period.

REGULATORS RELEASE DRAFT VOLCKER RULE

WASHINGTON, D.C. – October 11, 2011

The Federal Deposit Insurance Corporation (FDIC) met today to discuss a proposed notice of rulemaking about prohibitions and restrictions on proprietary trading and certain interests in, and relationships with, hedge funds and private equity funds, known as the Volcker Rule.

Tune in to today’s Tax Credit Tuesday podcast to hear Michael J. Novogradac, CPA, discuss the rule’s significance the tax credit community, specifically how it may affect banks’ ability to continue to invest in low-income housing tax credits, new markets tax credits and renewable energy tax credits.  

BILL INTRODUCED TO QUALIFY HOMELESS YOUTH FOR LIHTC HOUSING

WASHINGTON, D.C. – October 5, 2011

Reps. Jim McDermott, Erik Paulsen and Keith Ellison on Monday introduced legislation to allow formerly homeless youth to pursue a four-year education and still qualify for low-income housing tax credit (LIHTC) housing. H.R. 3076 would alter the LIHTC program’s student rule, which currently prohibits most low-income tenants from being full-time students unless they are single parents, parents receiving public assistance or former foster youth. The bill would add another exemption within the Internal Revenue Code for homeless youth. H.R. 3076 was referred to the House Ways and Means Committee.

Tune in to the October 11 Tax Credit Tuesday Podcast to hear Michael J. Novogradac, CPA, discuss more details about the effects this proposal could have on LIHTC regulations.

HUD POSTS 2012 FMRS, SETS 12/1 INCOME LIMIT RELEASE DATE

WASHINGTON, D.C. – September 30, 2011

The U.S. Department of Housing and Urban Development (HUD) today released its final fair market rents (FMRs) for fiscal year (FY) 2012. The FY 2012 FMRs take effect October 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. The notice also set December 1 as the formal publication date for income limits, beginning with FY 2012’s income limits. For more information about the FMRs and the new release date for annual income limit data, tune in to the October 4 Tax Credit Tuesday podcast.

CALIF. SUPREME COURT DENIES CRA MODIFIED STAY REQUEST

SACRAMENTO, Calif. – September 19, 2011

The California Supreme Court on September 14 denied the California Redevelopment Association’s (CRA’s) request for a modified stay that would have allowed redevelopment agencies that agreed to make remittance payments under the alternative voluntary redevelopment program to initiate new activities or obligations. The denial means that all redevelopment agencies can only service existing debt obligations until the court rules on the case. The court has said that it will deliver a ruling by January 15, 2012. Tune in to the Tax Credit Tuesday podcast on September 27 to learn more about the ruling and what it means for housing development in California.

IRS SUSPENDS REQUIREMENTS FOR CERTAIN VERMONT LIHTC PROPERTIES

Washington, D.C. – September 16, 2011

The Internal Revenue Service (IRS) today issued Notice 2011-74 to grant certain low-income housing tax credit (LIHTC) properties relief from specified Section 42 requirements to provide emergency housing relief needed as a result of the devastation caused by Tropical Storm Irene in Vermont beginning on August 27, 2011. The IRS said it will temporarily suspend income limitation and non-transient requirements for LIHTC properties that have received approval from the Vermont Housing Finance Agency to rent vacant units to individuals displaced by natural disasters. Other rules and requirements of Section 42 will continue to apply during the temporary housing period.

IRS INVITES COMMENT ON MO. HOUSING RELIEF

Washington, D.C. – September 8, 2011

The Internal Revenue Service (IRS) today requested comments on its notice that suspended certain requirements for low-income housing tax credit properties in Missouri. The IRS, in Notice 2011-47, suspended the income limits, non-transient requirements and other requirements to areas of the state devastated by severe storms, tornadoes and flooding that began on April 19, 2011. No changes are being made to Notice 2011-47 at this time. The IRS will accept comments on the notice until November 7, 2011.

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