WASHINGTON – March 10, 2014
Today, the Internal Revenue Service (IRS) invited public comments regarding Form 8609 and 8609-A for low-income housing tax credit (LIHTC) allocation and certification. No changes have been made to either document. Written comments are due on or before May 9, 2014.
WASHINGTON – March 7, 2014
Last week, Rep. Hakeem Jeffries, D-N.Y., introduced the Low and Moderate Income Housing Act of 2014 to encourage mixed-income housing development. The bill, H.R. 4130, would replace the 40-60 minimum set-aside test under Subparagraph (B) of section 42(g)(1) of the Internal Revenue Code of 1986 with a 50-50-120 test. The proposed change would require that 50 percent or more of a development’s residential units are both rent-restricted and occupied by individuals whose income is at least 50 percent, but not more than 120 percent, of area median income. Upon introduction, H.R. 4130 was referred to the House Committee on Ways and Means.
WASHINGTON – March 4, 2014
The Obama administration today released its “Green Book” for the proposed fiscal year 2015 budget. The Green Book describes the administration’s proposed changes to the Low-Income Housing Tax Credit (LIHTC) program, New Markets Tax Credit (NMTC) program and renewable energy production tax credit (PTC) program, among other things. Changes to the LIHTC program include allowing states to convert a portion of their private activity bond volume caps into LIHTCs; allowing owners to use an average-income criterion to meet occupancy requirements; changing the formula for determining 70 percent and 30 percent present value credit rates for LIHTC properties financed without private activity bonds; adding requirements for preservation and housing domestic abuse survivors; and making the LIHTC more beneficial to real estate investment trusts.
Tune in to the March 11 Tax Credit Tuesday podcast to learn more about the administration’s proposed FY 2015 budget.
WASHINGTON – March 4, 2014
In its proposed budget for fiscal year (FY) 2015, the Obama administration proposes expanding and reforming the low-income housing tax credit (LIHTC). Additional details about these proposals are expected later today and Novogradac & Company will post an update when more information becomes available.
WASHINGTON – Feb. 27, 2014
The Internal Revenue Service (IRS) today announced in Notice 2014-15 that state housing finance agencies (HFAs) participating in the Physical Inspections Pilot Program will have until Dec. 31, 2014 to satisfy certain physical inspection and certification requirements under Section 42. Notice 2014-15 extends the deadline for using alternative methods to meet the requirements outlined in Notice 2012-18, which expired Dec. 31, 2012. The pilot program was created by the Rental Policy Working Group to determine the feasibility of avoiding duplicative physical inspections by conducting one coordinated inspection.
Tune into the March 3 Tax Credit Tuesday podcast to hear more about the Physical Inspections Pilot Program.
WASHINGTON – Feb. 26, 2014
Ways and Means Chairman Dave Camp, R-Mich., today released a draft tax reform proposal that would repeal the historic rehabilitation tax credit (HTC) and the renewable energy investment tax credit (ITC) and production tax credit (PTC). The draft does not include any reference to the new markets tax credit (NMTC).
The proposal would retain the low-income housing tax credit (LIHTC) in the revised tax code but would make several changes. Under the proposal, state and local housing authorities would allocate qualified basis, rather than tax credits. The proposed annual amount of allocable basis for each state would be equal to $31.20 multiplied by the state’s population, with a minimum annual amount of $36,300,000. In addition, the draft calls for including repealing the 4 percent credit, extending the credit period to 15 years from 10, repealing the increased basis rule for high-cost and difficult development areas, revising the general-public-use requirement to provide occupancy preferences only for individuals with special needs and veterans, and repealing the requirement that states include the energy efficiency and historic nature of the development in their selection criteria.
Novogradac & Company is developing a detailed analysis of the proposal, so stay tuned.
WASHINGTON – Feb. 24, 2014
The Internal Revenue Service (IRS) today released its 2014 Calendar Year Resident Population Figures. These figures are used to determine states’ 2014 low-income housing tax credit (LIHTC) ceilings and tax-exempt private activity bond caps. Each state’s LIHTC ceiling in 2014 is equal to the greater of $2.30 multiplied by the state population or $2.635 million; a state’s tax-exempt bond volume cap will be the greater of $100 multiplied by the state population or $296,825,000. Notice 2014-12 includes the population estimates for each state, territory and insular area.
Tune into the March 4 Tax Credit Tuesday podcast to hear more about the 2014 population estimates.
EAST LANSING, MICH. – Feb. 7, 2014
President Barack Obama today signed the Agriculture Act of 2014 into law. The legislation ensures that communities eligible for the U.S. Department of Agriculture’s (USDA) rural housing programs in 2000 will retain their eligibility through 2020, including more than 900 communities that would have become ineligible because of the use of 2010 Census data. It also increases the population limit for areas defined as rural from 25,000 to 35,000.
WASHINGTON – Feb. 4, 2014
The U.S. Senate today passed the farm bill that was approved by the House last week, ensuring that communities currently eligible for the U.S. Department of Agriculture’s (USDA) rural housing programs would retain their eligibility through 2020, including more than 900 communities that would have become ineligible because of the use of 2010 Census data. Loss of a rural designation could have affected future development of low-income housing tax credit (LIHTC) properties and access to other sources of funding for new and existing properties. The bill also increased the population limit for areas defined as rural from 25,000 to 35,000. The White House has said that President Barack Obama intends to sign the bill into law.
Tune into the Feb. 11 Tax Credit Tuesday podcast to hear more about what the bill could mean for LIHTC developments.
WASHINGTON – Jan. 27, 2014
A group of 33 senators last week sent a letter to Mel Watt, director of the Federal Housing Finance Agency (FHFA), urging him to lift the suspension of contributions to the National Housing Trust Fund (NHTF) and the Capital Magnet Fund (CMF). Initiated by Sens. Jack Reed, D-R.I.; Barbara Boxer, D-Calif.; Elizabeth Warren, D-Mass.; and Bernie Sanders, I-Vt., the letter argued that funding the NHTF and CMF would help alleviate the national affordable rental housing shortage. Contributions to the NHTF and CMF have been suspended since 2008, when Fannie Mae and Freddie Mac, the intended funding sources, were placed into conservatorship.