Low-Income Housing Tax Credits:

News Archive

2006

 
December

RENTAL COSTS CONTINUE TO CLIMB

WASHINGTON, D.C. - December 13, 2006

The cost of affordable rental housing climbed again in 2006, according to the National Low Income Housing Coalition's (NLIHC) annual Out of Reach report released yesterday. NLIHC reports that minimum wage earners are unable to afford the fair market rent (FMR) of a one-bedroom home anywhere in the country, and 88 percent of renters in cities live in areas where the FMR for a two-bedroom rental is not affordable even with two minimum wage jobs. Out of Reach 2006 provides data for each state, metropolitan area and county in the country. A discussion of its findings will be available in the January issue of The Valuation Report.

HUD, TREASURY TO CONSIDER CHANGES TO LIHTC PROGRAM IN COMING YEAR

WASHINGTON, D.C. - December 11, 2006

Federal agencies, including the Department of Housing and Urban Development (HUD), Internal Revenue Service (IRS) and Treasury, today published their semiannual regulatory agendas in the Federal Register, listing regulations and other guidance projects that are planned or that will be developed in the coming year. Among the guidance planned are rules in various stages such as one to establish rent levels for project-based unit projects with low-income housing tax credits (LIHTCs) inside and outside of qualified census tracts, and a rule that would amend the Indian Housing Block Grant (IHBG) program regulations to clarify that IHBG funds may be used for project-based or tenant-based rental assistance in LIHTC projects on behalf of a tenant receiving assistance under the Native American Housing Assistance and Self-Determination Act (NAHASDA) of 1996. Click here for a copy of HUD's regulatory agenda. Treasury also has guidance planned regarding amendments to the LIHTC program. Click here for Treasury's guidance agenda.

EXTENSION URGED FOR HOUSING, BUSINESS PROVISIONS IN GO ZONES

BATON ROUGE, La. - December 4, 2006

Louisiana Gov. Kathleen Babineaux Blanco and Louisiana Recovery Authority (LRA) chairman Norman C. Francis renewed their push for Louisiana's congressional delegation to support extending several key provisions of the Gulf Opportunity Zone (GO Zone) Act of 2005. In a letter sent December 1, they called on Congress extend the bonus depreciation provided by the GO Zone Act, and extend until December 31, 2010 the deadline for placing low-income housing tax credit (LIHTC) developments in service, as well as the deadline for benefits to these housing developments available through the GO Zone bonus depreciation and GO Zone LIHTC "basis boost."

November

HUD INVITES COMMENTS REGARDING UTILITY ALLOWANCE ADJUSTMENTS

Washington, D.C. - November 20, 2006

The U.S. Department of Housing and Urban Development (HUD) today invited comments concerning utility allowance adjustments. Multifamily project owners are required to advise the HUD secretary of the need for and request approval of a new utility allowance for tenants. Comments will be accepted through December 20.

IRS ANNOUNCES INFLATION ADJUSTED LIHTC AND BOND CAPS FOR 2007

Washington, D.C. - November 9, 2006

The Internal Revenue Service (IRS) today announced in Revenue Procedure 2006-53 the inflation-adjusted low-income housing tax credit (LIHTC) and private activity bond caps for 2007. For calendar year 2007, the amounts used under § 42(h)(3)(C)(ii) to calculate the state LIHTC is the greater of $1.95 multiplied by the state population or $2,275,000. The amount used under §146(d)(1) to calculate the state ceiling for the volume cap for private activity bonds in 2007 is the greater of $85 multiplied by the state population or $256,235,000. Click here to view Rev. Proc. 2006-53.

TREASURY, IRS ISSUE REGULATIONS ON REQUIREMENTS FOR DISCLOSING REPORTABLE TRANSACTIONS AND MAINTAINING LISTS

Washington, D.C. - November 1, 2006

The Treasury Department and the Internal Revenue Service (IRS) today issued updated regulations reflecting changes to the requirements for disclosure of reportable transactions by taxpayers and material advisors and reflecting changes to the requirements for list maintenance by material advisors made by the American Jobs Creation Act of 2004. The Treasury Department and IRS previously issued interim guidance on these updated rules and on the parallel set of rules regarding taxpayer disclosure of reportable transactions. In drafting the new regulations, the IRS says consideration was given to comments received in response to the interim guidance. Click here for a copy of Treasury Decision 9295, final and temporary regulations on modifications to the Section 6011, 6111 and 6112 regulations.

Comments on the proposed changes to Section 6112, proposed changes to Section 6011 and proposed changes to Section 6111 will be accepted through January 31, 2007. In particular, comments are requested on how the regulations can be targeted to capture useful information about potentially abusive transactions while minimizing the burden imposed on taxpayers and material advisors.

Join Novogradac & Company LLP at its upcoming conferences on Nov. 29- Dec. 1 in Las Vegas or Jan. 10-12 in Miami, Fla. to discuss these important changes to the Internal Revenue Code that may affect general partners and/or developers of low-income housing tax credit (LIHTC) partnerships or properties that previously were thought exempt from reporting as tax shelters under IRC §6111.

October

TREASURY INVITES COMMENTS ON FORM 8586: LOW-INCOME HOUSING CREDIT

Washington, D.C. - October 19, 2006

The Treasury Department today invited comments on Form 8586, which is used by owners of residential rental projects providing low-income housing to claim the low-income housing tax credit (LIHTC) for part of the cost of constructing or rehabilitating such low-income housing. Form 8586 is used by taxpayers to compute the credit and by the IRS to verify that the correct credit has been claimed. No changes to the form have been proposed; the invitation to comment was published as part of the effort to reduce paperwork and respondent burden as required by the Paperwork Reduction Act of 1995.

LISTS OF DDA AND QCT CHANGES

Washington, D.C. - October 6, 2006

Following the U.S. Department of Housing and Urban Development (HUD) designations last week of difficult development areas (DDAs) and qualified census tracts (QCTs) for 2007, Novogradac & Company LLP has compiled lists of changes from 2006 to 2007 for both non-metropolitan and metropolitan counties. Greater increases in DDAs were seen in southern states such as Arkansas and Mississippi, perhaps in part due to the provisions of the Gulf Opportunity Zone (GO Zone) Act. Many states saw little change in DDA designations from 2006 to 2007. A few states had only subtractions from the list of DDAs with no additions; for example, Puerto Rico has 15 fewer DDA counties (or municipios) in 2007 when compared with 2006.

QCT data for 2007 was compiled using the 2000 Census along with new metropolitan statistical area (MSA) definitions set forth in OMB Bulletin No. 06-01. This list shows the changes in QCTs designations in California; additional states' information will be added to this page as it becomes available. Non-metropolitan areas of California saw virtually no change in QCT designation from 2006. However, a couple of counties (specifically Imperial and Kings counties) are now designated as metropolitan areas for 2007. Los Angeles saw the greatest increase with more than 45 additions to the list of QCTS.

FEDERAL HOUSING FINANCE BOARD PUBLISHES FINAL AHP RULE

Washington, D.C. - October 6, 2006

The Federal Housing Finance Board (FHFB) today announced a final rule amending its Affordable Housing Program (AHP) regulation by making several changes, including many that affect deals that use AHP financing in conjunction with low-income housing tax credits (LIHTCs). FHFB says the final rule removes prescriptive requirements, clarifies certain operational requirements, provides additional discretionary authority in certain areas, removes certain authorities and otherwise streamlines and reorganizes the regulation. The final rule is effective on January 1, 2007.

CENSUS BUREAU REPORTS INCREASE IN MEDIAN RENTS

Washington, D.C. - October 5, 2006

The real median cost of renting a home increased nationally by 6.7 percent from 2000 to 2005, according to new 2005 American Community Survey (ACS) data released today by the U.S. Census Bureau. Some of the highest real median rent percentage increases among the large cities were found in San Diego (27.2 percent), Detroit (22.5), and Los Angeles (15.9). Real median rent actually decreased in some of the nation’s largest cities including San Jose, Calif. (-9.4 percent), and Dallas (-3.0). The ACS provides updated information about the nation’s changing population every year. Without the ACS, this type of information — historically gathered just once a decade — would not be available for communities until 2012.

BILL INTRODUCED TO AMEND LIHTC FULL-TIME STUDENT HOUSEHOLD REQUIREMENTS

Washington, D.C. - October 4, 2006

Sen. Rick Santorum, R-Pa., last week introduced a bill to amend the Internal Revenue Code's requirements regarding the low-income housing tax credit (LIHTC) to specify that minor children in grades K-12 should not count toward the determination of what is a full-time student household. S. 3941 also strikes the requirement that single parents and their children must not have been claimed as dependents of another individual to qualify for the single parent with children exemption, and it adds a new exemption for working adults who are full-time students pursuing a high school diploma or GED. Click here for a copy of Santorum's floor statement introducing the bill.

HUD PUBLISHES OCAFs FOR 2007

Washington, D.C. - October 2, 2006

The U.S. Department of Housing and Urban Development today published operating cost adjustment factors (OCAFs) for Section 8 rent adjustments at contract renewal for fiscal year 2007. OCAFs are used to calculate Section 8 rent adjustments at contract renewal under section 524 of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (MAHRA).

 

September

IRS ANNOUNCES LIHTC ALLOCATIONS TO NATIONAL POOL

Washington, D.C. - September 29, 2006

The Internal Revenue Service (IRS) this week published the amounts of unused low-income housing tax credit (LIHTC) carryovers for calendar year 2006 that were allocated to 31 qualified states under Internal Revenue Code §42(h)(3)(D). Revenue Procedure 2006-38 details how more than $6.2 million of unused LIHTCs were divided among the states in the national pool. California received the largest allocation of $949,059 in LIHTCs. For a copy of Rev. Proc. 2006-38, click here.

HUD PUBLISHES FINAL 2007 FAIR MARKET RENTS

Washington, D.C. - September 27, 2006

The U.S. Department of Housing and Urban Development today published final fiscal year 2007 fair market rents (FMRs), effective October 1, 2006. FMRs are used 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 2007 DDAs AND QCTs

Washington, D.C. - September 27, 2006

The U.S. Department of Housing and Urban Development (HUD) has designated difficult development areas (DDAs) and qualified census tracts (QCTs) 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 and at this time is making new designation of QCTs based on revised metropolitan statistical area (MSA) definitions published by the Office of Management and Budget (OMB) and on the 2000 Census’ more detailed census tract income distribution data.

The notice includes those areas designated as 2006 DDAs as required by the Gulf Opportunity Zone (GO Zone) Act of 2005, which designated all areas declared by President Bush as eligible for individual or individual and public assistance under the Stafford Act due to hurricanes Katrina, Rita and Wilma as DDAs through the end of 2008. It exempts these GO Zone DDAs from the 20 percent population cap on regular DDAs, allowing HUD to designate a greater number of difficult development areas. Click here for a list of additions and deletions to the list of metropolitan DDAs.

Notable deletions include Las Vegas, Nev. and Orlando, Fla., which were DDAs in 2006 but was not designated as such for 2007. Under limited circumstances, an LIHTC project that is in an area that is on the list in 2006 but not in 2007 can retain the DDA or QCT designation. Those limited circumstances and the effective dates for the 2007 designations are listed in this notice, and will be discussed, along with the major changes in DDAs and QCTs, in the November issue of the LIHTC Monthly Report.

Join Novogradac & Company LLP to discuss this and other recent developments affecting the affordable housing industry at its Tax Credit Housing Finance Conference, November 29-December 1, 2006, in Las Vegas, Nev.

TCAC ANNOUNCES SPECIAL ALLOCATION ROUND

Sacramento, Calif. - September 26, 2006

The California Tax Credit Allocation Committee (TCAC) yesterday announced a third funding round for federal 4 percent low-income housing tax credits (LIHTCs) along with state tax credits. TCAC will make available approximately $7 million in state low income housing tax credits in this third round. Applications will be due no later than 5 p.m., October 31, 2006 at the tax credit allocation committee headquarters in Sacramento. Applications will not be accepted in the Treasurer's Los Angeles office for this special round.

HUD WITHDRAWS PROPOSAL TO INCREASE MIPs

Washington, D.C. - September 22, 2006

The U.S. Department of Housing and Urban Development (HUD) today announced the withdrawal of its proposal to increase multifamily mortgage insurance premiums (MIPs) for fiscal year 2007. HUD issued a notice on June 28, 2006 that proposed changes in the MIPs for Federal Housing Administration (FHA) multifamily mortgage insurance programs whose commitments will be issued or reissued in FY 2007, with the exception of those that included low-income housing tax credits (LIHTCs). According to this notice to be published next week in the Federal Register, approximately 359 comments were received, and the comments, including a letter signed by 121 members of the U.S. House of Representatives and 26 Senators, were overwhelmingly opposed to the MIP increases. Based on consideration of the concerns raised in the comments, HUD decided not to proceed with implementation of the MIP increases for FY 2007 at this time. Instead, the FY 2006 MIPs, issued on August 30, 2005, will remain in effect. For all sections of the National Housing Act where the mortgagor equity is produced from the proceeds of the sale of LIHTCs, the MIP will remain at 45 basis points.

TEXAS HOUSING AGENCY TO HOLD PUBLIC HEARINGS

Austin, Texas - September 20, 2006

The Texas Department of Housing and Community Affairs (TDHCA) announced a series of 13 public hearings beginning tomorrow, September 21, to seek public comment on a wide ranging set of program rules, planning guidelines and policy documents, including rules for the low-income housing tax credit (LIHTC) and multifamily bond programs. TDHCA will also accept comment on planning and policy documents including the affordable housing needs score, regional allocation formula, compliance monitoring policies and procedures and numerous rules relating to the department's underwriting processes.

TCAC RELEASES ROUND TWO RECOMMENDATIONS

Sacramento, Calif. - September 18, 2006

The California Tax Credit Allocation Committee (TCAC) last week released the point log, preliminary recommendations and waiting lists for the second round of applications for reservations of federal and state low-income housing tax credits (LIHTCs) for 2006. These second-round applications are scheduled for discussion and action at TCAC’s meeting on Wednesday, September 20.

LOUISIANA ACTION PLANS PUBLISHED FOR REVIEW

Baton Rouge, La. - September 6, 2006

The Louisiana Recovery Authority (LRA) and Office of Community Development (OCD) last week published action plan amendments for public comment related to a research commercialization program, low-income housing tax credits (LIHTCs), small rental properties and mobile home owners. The public comment period will conclude on Monday, September 11. Click here for more information.  Click here to read and comment on the action plans.

August

GOTTFRIED TO KEYNOTE HOUSING CONFERENCE

San Francisco, Calif. - August 23, 2006

The Honorable Keith E. Gottfried, general counsel for the U.S. Department of Housing and Urban Development (HUD), will give the keynote luncheon address at Novogradac & Company LLP's 13th Annual San Francisco Affordable Housing Conference to be held at the Hyatt Regency San Francisco Airport on Thursday, September 14, 2006. Mr. Gottfried will speak on the creation of a new HUD Office of Compliance Assistance that is designed to help developers comply with HUD regulations.

As HUD's general counsel, Mr. Gottfried leads close to 400 attorneys and 300 non-attorneys in a nationwide organization with headquarters in Washington, D.C., 10 regional offices and close to 40 field offices. He serves as the chief legal officer for HUD and is the senior legal advisor to the Secretary, Deputy Secretary and other agency principal staff providing advice on all aspects of federal laws, regulations and policies applicable to public and Indian housing, community development programs, mortgage insurance programs, complex mixed financing transactions for residential development and health-care facilities, fair housing enforcement and urban development programs.

Washington, D.C. - August 15, 2006

The Treasury Department yesterday announced the release of its 2006 - 2007 Priority Guidance Plan. In Notice 2006-36, the Treasury Department solicited suggestions from all interested parties, including taxpayers, tax practitioners and industry groups to formulate a plan that focuses resources on guidance items that are most important to taxpayers and tax administration. The 2006 - 2007 Priority Guidance Plan contains 264 projects to be completed over a 12 -month period, from July 2006 through June 2007. One of the items in the plan is an update of Revenue Procedure 95-28 regarding relief from certain low-income housing tax credit (LIHTC) requirements under Internal Revenue Code Section 42 for LIHTC projects affected by major disasters. In addition to the items on this year's plan, an appendix lists the more routine guidance that is published each year. Copies of the 2006 - 2007 Priority Guidance Plan can be obtained from the IRS web site.

Austin, Texas - August 11, 2006

The Texas Department of Housing and Community Affairs (TDHCA) this week announced the release of the “Proposed Policy for Addressing Cost Increases for 2004 and 2005 Competitive Housing Tax Credit Developments,” as approved in its July 28, 2006 board meeting. This policy is proposed in order to implement changes that are designed to improve the financial feasibility of certain low-income housing tax credit (LIHTC) developments in Texas. Click here for more information.

Washington, D.C. - August 7, 2006

The Senate last week failed to that legislation that would have extended through 2009 the bonus depreciation eligibility deadline for nonresidential real and residential rental property in the Gulf Opportunity Zone. The bill (H.R. 5970), referred to as the 'Trifecta' bill because it included permanent estate tax relief, tax extenders and increasing the minimum wage, failed on a 56-42 vote. Supporters of the provisions included in the measure have expressed hope that they could be passed yet this year after Congress returns from recess.
This and other legislation related to the low-income housing tax credit will be discussed by industry experts at Novogradac & Company LLP's 13th Annual San Francisco Affordable Housing Conference September 14-15. Click here for more information about the event.

Washington, D.C. - August 4, 2006

Last week the governing board of the Texas Department of Housing and Community Affairs (TDHCA) approved the 2006 low-income housing tax credit (LIHTC) allocation, awarding $48.9 million in federal housing tax credits to 73 applicants. TDHCA estimates that these credits will help create 11,776 units of affordable rental housing serving households earning 60 percent or less of the area median family income. The allocation included nearly $5.2 million in forward commitments from the 2007 LIHTC pool TDHCA made to seven applications in this year's round. A complete list of all developments receiving tax credits in the 2006 allocation cycle is located online at www.tdhca.state.tx.us.

July

Washington, D.C. - July 25, 2006

Fannie Mae announced yesterday that the company, through its lender and housing partners, participated in financing $11.6 billion in multifamily rental housing in the first half of 2006. Fannie Mae's multifamily financing activities include debt financing through lender partners and investments in low-income housing tax credits (LIHTCs) through syndication partners. Click here for more information.

Washington, D.C. - July 13, 2006

The National Council of State Housing Agencies (NCSHA) reports that Reps. Jim Ramstad, R-Minn, and Richard Neal, D-Mass., last month circulated a Dear Colleague letter seeking support for H.R. 4873, a bill introduced on March 2 to amend the Internal Revenue Code to encourage investment in affordable housing. H.R. 4873 would make several changes to the low-income housing tax credit (LIHTC) program, including renaming it the Affordable Housing Tax Credit, modifying the rules for determining applicable percentage, providing an increase in credit for buildings in state designated areas, modifying the scattered site rule and allowing tax credits for Section 8 moderate rehabilitation developments. H.R. 4873 would also make several changes to the rules governing mortgage revenue bonds and qualified residential rental project exempt facility bonds.

Washington, D.C. - July 12, 2006

The U.S. Department of Housing and Urban Development (HUD) today invited comments regarding HUD Form 2530, Previous Participation Certification. HUD uses this form to evaluate the feasibility of applicants with respect to their previous track records to ensure participation from responsible individuals and organizations in HUD's multifamily housing programs. Form 2530 was at the center of discussions earlier this year when industry participants reported difficulty in submitting the form via HUD's online Active Partner Performance System (APPS) as required by HUD regulations implemented on October 12, 2005. HUD granted an extension to file paper forms but as of April 30, 2006 all participants in HUD multifamily mortgage and project based subsidy programs must submit the electronic version of Previous Participation Certificate via HUD's secure web server as a condition prerequisite to new or revised participation. Click here for a copy of the notice from today's Federal Register for details on submitting comments. Copies of documents related to the comment request, including screenshots of the APPS system, can be downloaded from HUD's web site.

Washington, D.C. - July 5, 2006

The California State Board of Equalization announced that the effective date for California Property Tax Rules 140, 140.1, 140.2 and 143 is July 23, 2006. These rules govern the availability of the property tax exemption for affordable housing developments that are owned by partnerships with both a not-for-profit general partner and a for-profit general partner. It was previously expected that the rules would not become effective until 2007. This development and its impact will be discussed at Novogradac & Company LLP's 13th Annual San Francisco Affordable Housing Conference September 13-15.

June

Washington, D.C. - June 13, 2006

Last week, the Affordable Housing Tax Credit Coalition (AHTCC) published suggested amendments to the to the regulations governing the filing requirements for the U.S. Department of Housing and Urban Development (HUD) Previous Participation Program (Form 2530). AHTCC reports that, in an effort to reduce what it describes as unnecessary and overly-burdensome filing requirements, coalition representatives have been working closely with staff for the Housing Financial Services Committee, HUD, National Association of State and Local Equity Funds, National Leased Housing Association, various low-income housing tax credit investors and others within the industry to propose changes to the program. For more information and copy of the proposed amendments, please visit www.taxcreditcoalition.org.

May

Washington, D.C. - May 23, 2006

The Internal Revenue Service's (IRS) Advisory Committee on Tax Exempt and Government Entities (ACT) will hold a public meeting at 9 a.m., June 7, 2006, at 1111 Constitution Ave., N.W., Washington, D.C. During the meeting, four project teams will present recommendations to the IRS commissioner and senior leadership of the IRS's Tax Exempt and Government Entities Division (TE/GE). The projects cover: policies and guidelines for Form 990 revision, document compliance program for 403(b) arrangements, public employers' toolkit for preparing payrolls, and the effect of IRS audit information on tax-exempt bond market. Click here for additional information.

Washington, D.C. - May 22, 2006

U.S. Rep. Richard H. Baker, R-Baton Rouge, a senior member of the House Financial Services committee, which has jurisdiction over federal housing policy, and the committee’s top-ranking Democrat, Rep. Barney Frank of Massachusetts, last week introduced legislation that would reform the way the federal government responds to long-term housing needs created by natural disasters. The Natural Disaster Housing Reform Act, H.R. 5393, would designate HUD the lead federal agency on housing for disasters resulting in long-term housing needs.

Washington, D.C. - May 4, 2006

Sen. John Sununu, R-N.H., yesterday introduced legislation that would reduce excessive paperwork and reporting requirements for small public housing authorities (PHAs), allowing them to focus more energy on their mission to provide affordable housing in the communities they serve. Under S. 2707, the “Small Public Housing Authorities Paperwork Reduction Act,” PHAs with 500 or fewer public housing units would be exempt from the requirement of submitting an annual plan to the Department of Housing and Urban Development (HUD). Only those PHAs that have demonstrated previous compliance with HUD regulations would be eligible for the exemption.

Washington, D.C. - May 2, 2006

The adjusted basic FHA multifamily mortgage limits for calendar year 2006 have been increased by 3.51 percent over the 2005 level according to a notice published today by the U.S. Department of Housing and Urban Development (HUD).

Washington, D.C. - May 1, 2006

The Internal Revenue Service (IRS) last week published a memorandum to provide criteria for processing applications for recognition of exemption under Internal Revenue Code (IRC) Section 501(c)(3) or (c)(4) where the applicant proposes to participate, as a general partner, in a Section 42 low-income housing tax credit (LIHTC) limited partnership. Click here for a copy of the memo. The criteria and their significance to the LIHTC industry will be discussed in the June LIHTC Monthly Report.

April

Baton Rouge, La. - April 27, 2006

The Louisiana Housing Finance Agency (LHFA) received 232 applications seeking $230 million in low-income housing tax credits (LIHTCs) during the application round that closed April 17, according to BusinessReport.com. This overwhelming interest is attributed to the additional LIHTCs provided by Congress to LHFA as a result of the passage of the Gulf Opportunity Zone Act of 2005 and in response to hurricanes Katrina and Rita. The legislation raised Louisiana’s LIHTC ceiling for 2006, 2007 and 2008 to $18 per capita, giving LHFA $56,759,274 in LIHTC authority for each of those years. According to LHFA’s amended qualified allocation plan, the agency’s board will make LIHTC reservations for this round of applications on June 14.

Washington, D.C. - April 25, 2006

The House Financial Services Subcommittee on Housing and Community Opportunity will hold a hearing on H.R. 5039, the Saving America’s Rural Housing Act of 2006, today at 2 p.m. Introduced on March 29, H.R. 5039 would create a revitalization program for the U.S. Department of Agriculture (USDA) Rural Development Agency’s multifamily housing assistance program, known as Section 515.

Washington, D.C. - April 24, 2006

Federal agencies, including the Department of Housing and Urban Development (HUD), Internal Revenue Service (IRS) and Treasury, today published their semiannual regulatory agendas, listing regulations and other guidance projects that are planned or that will be developed in the coming year. Among the guidance listed are rules in various stages regarding the Section 8 and other HUD administered programs in combination with the low-income housing tax credit (LIHTC) program. Click here for a copy of HUD's regulatory agenda. Treasury’s agenda also lists guidance in the proposed rule stage for the LIHTC program.

Washington, D.C. - April 12, 2006

The Office of Thrift Supervision (OTS) today published a revised definition of “community development” in its Community Reinvestment Act (CRA) regulations designed to encourage savings associations to increase their community development lending, qualified investments and community development services in distressed or underserved rural areas and designated disaster areas. This change will make OTS's definition of community development and the definition of the other federal banking agencies uniform. OTS also published additional guidance related to this definition and other aspects of its CRA regulations in Q&A form.

Washington, D.C. - April 11, 2006

The U.S. Department of Housing and Urban Development (HUD) today published a notice changing the effective date language for the 2003 difficult development areas (DDAs) that HUD did not designate as DDAs in 2004, to include December 17, 2004. This will allow the designation to apply to projects affected by a misinterpretation of a November 2, 2004 notice by a low-income housing tax credit (LIHTC) allocating agency. Click here for a copy of the notice.

Washington, D.C. - April 7, 2006

A notice to be published in the Federal Register on Monday will provide additional guidance to assist public housing agencies and multifamily project owners and management agents with the implementation of the new Section 8 eligibility restrictions for the final rule that was published on December 30, 2005 and became effective on January 30, 2006. Click here for an advance copy of the notice.

Columbia, S.C. - April 3, 2006

The South Carolina State Housing Finance and Development Authority (SCHFDA) will receive public comment on a proposed Year 15 policy and qualified contract request to be used in conjunction with the low-income housing tax credit (LIHTC) program. A draft copy of both documents is available for review on the authority’s web site: www.schousing.com. Written comments will be accepted through April 28, 2006.

March

Jackson, Miss. - March 30, 2006

The Mississippi Home Corporation (MHC) last week published a program bulletin to supplement the 2006 qualified allocation plan (QAP). Based on the release of final population figures, Mississippi’s estimated 2007 per capita low-income housing tax credit (LIHTC) authority is $5,550,067. The Gulf Opportunity Zone Act of 2005 provides that Mississippi will have $35,429,094 in additional housing credits annually for calendar years 2006, 2007 and 2008. These credits are required to be allocated to developments located within the state’s 49 GO Zone counties as identified in the 2006 QAP. To date, MHC has committed $11,923,507 of its GO Zone LIHTC authority to fund eligible developments from the 2005 cycle waiting list, expediting the production of affordable housing within those areas. This leaves a 2006 GO Zone LIHTC authority balance of $23,505,587.

Washington, D.C. - March 27, 2006

In Notice 2006-36, the Internal Revenue Service (IRS) invites public comment on recommendations for items that should be included on the 2006-2007 Guidance Priority List. Treasury's Office of Tax Policy and the IRS use the guidance priority list each year to identify and prioritize the tax issues that should be addressed through regulations, revenue rulings, revenue procedures, notices and other published administrative guidance. The 2006-2007 Guidance Priority List will establish the guidance that the Treasury Department and the IRS intend to issue from July 1, 2006, through June 30, 2007.

Washington, D.C. - March 24, 2006

In its Notice 2006-38, the Internal Revenue Service advised taxpayers with Internal Revenue Code Section 47 rehabilitation credit property within the areas affected by the 2005 hurricanes that they will have 36 months to bring the properties back into service to avoid recapture on existing properties. The relief applies to rehabilitation projects located in the Gulf Opportunity Zone (GO Zone), the Rita GO Zone, or the Wilma GO Zone affected by hurricanes Katrina, Rita, or Wilma. The notice explained that taxpayers generally have a reasonable period to repair and restore qualified rehabilitated buildings and to return the buildings to actual service without the buildings being considered permanently retired from service. The IRS will deem up to 36 months to be a reasonable period. 

Join Novogradac & Company LLP at the Solutions and Development Opportunities in the Gulf Opportunity Zone seminar to explore opportunities for affordable housing and community development in the Gulf States, provided for in the GO Zone Act of 2005.

Washington, D.C. - March 23, 2006

In Notice 2006-38, the Internal Revenue Service (IRS) today advised taxpayers of certain relief provided to taxpayers having rehabilitation credit projects in areas affected by hurricanes Katrina, Rita or Wilma in 2005. Internal Revenue Code (IRC) §1400N(h)(1), added by section 101 of the Gulf Opportunity Zone (GO Zone) Act of 2005, increases the credit percentage to 13 percent for qualified rehabilitation expenditures paid or incurred during the period beginning on August 28, 2005, and ending on December 31, 2008, with respect to any qualified rehabilitated building located in the GO Zone. IRC §1400N(h)(2) increases the credit percentage to 26 percent for qualified rehabilitation expenditures paid or incurred during the same period, with respect to any certified historic structure located in the GO Zone.

Join Novogradac & Company LLP at the Solutions and Development Opportunities in the Gulf Opportunity Zone seminar to explore opportunities for affordable housing and community development in the Gulf States, provided for in the GO Zone Act of 2005.

Washington, D.C. - March 22, 2006

The Internal Revenue Service (IRS) today invited comments on Form 8611, Recapture of Low-Income Housing Credit. Under Internal Revenue Code (IRC) Section 42 if a low-income housing tax credit (LIHTC) property is disposed of or if it fails to meet certain requirements over a 15-year compliance period and a bond is not posted, the owner must recapture on Form 8611 part of the credits taken in prior years. There are no changes being made to the form at this time; today’s notice is part of a continuing effort to reduce paperwork and respondent burden as required by the Paperwork Reduction Act of 1995. Written comments will be accepted on or before May 22, 2006.

Washington, D.C. - March 20, 2006

The Internal Revenue Service (IRS) today published Notice 2006-21, informing Alabama, Louisiana and Mississippi of their state population portion in the Gulf Opportunity Zone for purposes of determining the Gulf Opportunity housing amount under Internal Revenue Code (IRC) Section 1400N(c)(1)(B) and maximum aggregate face amount of qualified Gulf Opportunity Zone Bonds under IRC Section 1400N(a)(3). The Gulf Opportunity Zone Act of 2005 Section 1400M and §1400N to the IRC to provide certain tax benefits to those areas affected by hurricanes Katrina, Wilma and Rita.

Join Novogradac & Company LLP at the Solutions and Development Opportunities in the Gulf Opportunity Zone seminar to explore opportunities for affordable housing and community development in the Gulf States, provided for in the GO Zone Act of 2005. The GO Zone Act provides an emergency increase in tax credit and bond authority in Alabama, Louisiana, Mississippi and other Gulf States. These tax credits and tax-exempt bonds will be used directly to begin the rebuilding process of the Gulf Coast region.

Washington, D.C. - March 16, 2006

The House Subcommittee on Select Revenue Measures of the Committee on Ways and Means today held a hearing on the use of tax-preferred bond financing. Witnesses including Eric Solomon, Deputy Assistant Secretary Regulatory Affairs at the Treasury Department, testified before the committee. Rep. Michael McNulty, D-N.Y. opened the hearing by noting that states and localities have an outstanding record in the use of tax-preferred financing. “Tax-exempt bonds support many important community priorities, including financing for our public schools, airports, roads, hospitals, veterans’ housing, water and sewage facilities, hazardous waste disposal and the low-income rental housing market,” McNulty said. Click here for more information about the hearing.

To discuss any crucial testimony provided at this hearing and to learn how to combine tax-exempt bond financing with low-income housing tax credits to develop affordable housing, join Novogradac & Company LLP at the Credit & Bond Financing for Affordable Housing Conference in Chicago, Ill. May 10-12, 2006.

Washington, D.C. - March 16, 2006

The U.S. Department of Agriculture’s (USDA) Rural Housing Service (RHS) today published a notice of funding availability (NOFA) for the Section 515 Multi-Family Housing Preservation and Revitalization Restructuring (MPR) Demonstration Program for fiscal year 2006. RHS anticipates that the total amount of funding available under this NOFA is $173,951,000, which it estimates could revitalize approximately 200 properties (5,400 units).

Washington, D.C. - March 14, 2006

The U.S. Department of Housing and Urban Development (HUD) today proposed a rule that would implement a number of changes to the Mark-to-Market (M2M) program, HUD's mortgage restructuring program for FHA-insured projects with project-based Section 8 assistance, to facilitate processing based on statutory changes and HUD's technical operational experience in administering the program. HUD published a rule on January 12 addressing the renewal of expiring Section 8 project-based assistance contracts; this rule addresses administrative and programmatic issues other than the project-based assistance contracts. HUD will accept comments on today’s proposed rule through May 15, 2006.

Washington, D.C. - March 13, 2006

In Notice 2006-22, the Internal Revenue Service (IRS) today released new population figures for calculating the 2006 population-based component of states’ low-income housing tax credit (LIHTC) ceilings, 2006 volume caps and the 2006 volume limit. The population figures for the 50 states, the District of Columbia, and Puerto Rico were released by the Census Bureau on December 22, 2005. The population figures for American Samoa, Guam, Northern Mariana Islands and U.S. Virgin Islands were released on July 17, 2003. Under Revenue Procedure 2005-70, each state’s LIHTC ceiling in 2006 is the greater of $1.90 multiplied by the state population or $2,190,000. Each state’s ceiling for the volume cap for private activity bonds in 2006 is the greater of $80 multiplied by the state population or $246,610,000. Click here for a copy of Notice 2006-22. Additional information will be available in the April issue of the LIHTC Monthly Report.

Washington, D.C. - March 9, 2006

The U.S. Department of Housing and Urban Development (HUD) yesterday published a notice detailing the 39 individual funding opportunities that total approximately $2.2 billion in assistance and constitute HUD's 2006 Super Notice of Funding Availability (SuperNOFA). The key dates that apply to all HUD federal financial assistance made available through the SuperNOFA are found in each individual program NOFA. The individual program NOFAs identify the applicable agency contacts for each program. Click here for more information.

Washington, D.C. - March 8, 2006

The Department of Housing and Urban Development (HUD) today released income limits for 2006, effective March 8, 2006. Click here for links to median family income, income limits and accompanying information and tables from HUD.

Novogradac & Company LLP is also currently updating its Rent & Income Limit Calculator© to include 2006 data and new features.

To discuss the latest changes to the rent and income limits, join Novogradac & Company LLP at the Tax Credit Property Compliance Workshop May 11-12, 2006 in Chicago, Ill.

Washington, D.C. - March 6, 2006

Sen. Blanche Lincoln, D-Ark., last week introduced S. 2366 the companion bill to H.R. 1468, introduced last year by Rep. Nancy Johnson, R-Conn., which would replace the recapture bond provisions included in the low-income housing tax credit (LIHTC) program. The legislation would repeal the requirement under Section 42(j)(6) of the Internal Revenue Code that requires an investor seeking to dispose of an interest in an LIHTC property within the initial 15-year compliance period to post a surety bond in order to avoid future tax liability, provided the property was reasonably expected to remain a qualified low-income development for the remainder of its compliance period.

Join Novogradac & Company LLP May 10-12 in Chicago, Ill. to discuss the latest legislative and regulatory developments for the LIHTC program with industry experts at the Credit & Bond Financing for Affordable Housing Conference. Other topics will include prospects for preservation and new construction using LIHTCs, low-income housing related programs that face being cut in the 2007 budget and new opportunities for LIHTC and tax-exempt bond professionals.

Washington, D.C. - March 6, 2006

Rep. Jim Ramstad, R-Minn., last week introduced H.R. 4873, a bill that would amend the Internal Revenue Code of 1986 to encourage investment in affordable housing. The measure would make several changes to the low-income housing tax credit (LIHTC) program, including renaming it the Affordable Housing Tax Credit, modifying the rules for determining applicable percentage, providing an increase in credit for buildings in state designated areas, modifying the scattered site rule and allowing tax credits for Section 8 moderate rehabilitation developments. H.R. 4873 would also make several changes to the rules governing mortgage revenue bonds and qualified residential rental project exempt facility bonds.

Washington, D.C. - March 2, 2006

The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency today announced final guidance implementing the recent changes to their Community Reinvestment Act (CRA) regulations. The guidance clarifies, among other things, the availability of CRA consideration for bank activities that revitalize or stabilize designated disaster areas. The guidance, which takes the form of questions and answers, will be effective upon publication in the Federal Register, which is expected shortly. According to the notice, a bank’s loans, investments and services in support of disaster recovery that help to attract new, or retain existing, businesses or residents to a designated disaster area will receive CRA community development consideration for a 36-month period following designation of the area. The final regulations allow for extensions of this period in unusual cases, and the agencies announced that they plan to substantially extend the time periods in the Gulf Coast areas affected by hurricanes Rita and Katrina. The other major issue it addresses is implementation of the new community development test for banks with assets between $250 million and $1 billion. Click here for an advance copy of the Federal Register notice.

February

Washington, D.C. - February 23, 2006

The U.S. Department of Housing and Urban Development (HUD) today announced that it has revised the lists of designated difficult development areas (DDAs) for 2006 as required by the Gulf Opportunity Zone (GO Zone) Act of 2005, which designates all areas declared by President Bush as eligible for individual or individual and public assistance under the Stafford Act due to Hurricanes Katrina, Rita and Wilma as DDAs through the end of 2008, and exempts these GO Zone DDAs from the 20 percent population cap on regular DDAs. Low-income housing tax credit (LIHTC) projects in DDAs are eligible for up to 30 percent more LIHTC subsidy than projects not located in DDAs. HUD says that because some of the GO Zone DDAs had already been designated as regular DDAs for 2006, their exemption from the population cap allowed for the designation of additional DDAs. HUD will publish a notice in tomorrow’s Federal Register making these changes official; click here for an advance copy of the notice. HUD has also published tables listing the revised 2006 metropolitan DDAs and revised 2006 nonmetropolitan DDAs.

Sacramento, Calif. - February 17, 2006

Joanie Jones-Kelly, formerly the executive director of the California Industrial Development Financing Advisory Commission (CIDFAC), has been appointed the new executive director of the California Debt Limit Allocation Committee (CDLAC). Jones-Kelly replaces Laurie Weir, who resigned effective December 31, 2005 to serve as deputy treasurer under State Treasurer Phil Angelides. Weir is expected to represent Angelides on a number of committees including CDLAC and the California Tax Credit Allocation Committee (TCAC).

Washington, D.C. - February 16, 2006

Beginning February 27, 2006, the U.S. Department of Housing and Urban Development (HUD) Office of Community Renewal is offering a broadcast regarding approximately $19 billion that is reserved exclusively for businesses in Renewal Communities, Empowerment Zones and in the Gulf Opportunity Zone (GO Zone) through special tax incentives. A panel of experts from IRS will provide information and answer questions on the incentives for businesses in these designated areas. In preparation for this broadcast, HUD has posted background information on the tax incentives. Click here for more information on HUD’s webcast and copies of background information.

In addition, Novogradac & Company LLP will offer a Solutions and Development Opportunities in the Gulf Opportunity Zone seminar that will explore opportunities for affordable housing and community development in the Gulf States, provided for in the GO Zone Act of 2005. The GO Zone Act provides an emergency increase in tax credit and bond authority in Alabama, Louisiana, Mississippi and other Gulf States. These tax credits and tax-exempt bonds will be used directly to begin the rebuilding process of the Gulf Coast region.

Washington, D.C. - February 14, 2006

The U.S. Department of Housing and Urban Development (HUD) today published a supplemental notice regarding the fair market rents (FMR) for fiscal year 2006. On October 3, 2005, HUD published final FMRs for FY 2006 and identified 58 areas at 50th percentile FMRs, which consists of 48 areas previously eligible for 50th percentile FMRs plus 10 areas that are newly eligible. The 48 existing 50th percentile FMR areas were evaluated in a notice published August 25, 2005 and it was determined that only 14 of these areas would remain eligible to participate in the 50th percentile FMR program. Today’s notice confirms the eligibility of the 24 areas identified as having continuing or new eligibility for 50th percentile FMRs. Following a review of public comments, HUD today confirms and implements elimination of 50th percentile FMRs for the 34 areas identified as no longer eligible in the August 25, 2005 notice. Click here for more information.

Washington, D.C. - February 9, 2006

The U.S. Department of Housing and Urban Development (HUD) today published a final rule that makes streamlining and clarifying changes to the consolidated plan regulations of state and local governments. The final rule states that local jurisdictions should include low-income housing tax credits (LIHTCs) among the federal resources discussed in the consolidated plan, even though HUD does not administer them, because “the importance of the LIHTC program to jurisdictions cannot be overstated as a means of accomplishing the goals of a jurisdiction to provide housing for extremely low-income and low-income households.” Click here for the complete rule.

Washington, D.C. - February 7, 2006

The Internal Revenue Service (IRS) ruled in private letter ruling 200605004, released today, that for purposes of the Section 42 low-income housing tax credit (LIHTC), rehabilitation expenditures that are treated as a separate new building under Internal Revenue Code (IRC) § 42(e) may be treated by the taxpayer as placed in service at the close of the 24-month period ending in Year 2, notwithstanding that some or all of such expenditures are considered placed in service in Year 3 for historic rehabilitation tax credit purposes under IRC § 47.

Washington, D.C. - February 6, 2006

President George W. Bush today proposed a budget for fiscal year 2007 that includes $33.6 billion in discretionary spending for the U.S. Department of Housing and Urban Development (HUD) — a 1.8 percent decrease from the total appropriations approved by Congress for HUD in 2006 ($34.3 billion). In addition, the 2007 budget proposal again proposes no funding for several economic and community development programs, and would consolidate a number HUD programs with the Community Development Block Grant (CDBG) under the Strengthening America’s Communities Initiative, a strategy to be implemented by the Department of Commerce and HUD, an idea similar to one proposed last year and eventually rejected by Congress. Click here for more information about the 2007 proposed budget.

Albany, N.Y. - February 3, 2006

The New York Division of Housing and Community Renewal (DHCR) this week posted its responses to questions asked during its Unified Funding 2006 application workshops and subsequent discussions with prospective applicants regarding state and federal low-income housing tax credit (LIHTC) programs and the Urban Initiatives and Rural Area Revitalization Program.

Washington, D.C. - February 2, 2006

The Internal Revenue Service (IRS) yesterday invited comments concerning existing final regulations, Arbitrage Restrictions on Tax-Exempt Bonds. Section 148 of the Internal Revenue Code requires issuers of tax-exempt bonds to rebate certain arbitrage profits earned on non-purpose investments acquired with the bond proceeds. There is no change to these existing regulations at this time; this opportunity to comment is offered as part of the Treasury Department’s continuing effort to reduce paperwork and respondent burden as required by the Paperwork Reduction Act of 1995. Written comments will be accepted on or before April 3, 2006. Click here for details and instructions for submitting comments.

Washington, D.C. - February 1, 2006

The Internal Revenue Service (IRS) today published Notice 2006-11, which suspends certain requirements under Section 42 of the Internal Revenue Code for low-income housing tax credit (LIHTC) projects as a result of the devastation caused by Hurricane Rita. The notice says the states of Louisiana and Texas requested that the IRS grant relief similar to Notice 2005-69, which temporarily suspended certain requirements under Section 42 of the Internal Revenue Code for areas affected by Hurricane Katrina, to allow owners of LIHTC projects throughout the United States to provide temporary housing in vacant units to individuals who resided in jurisdictions designated for individual assistance in Louisiana and Texas and who have been displaced because their residences were destroyed or damaged as a result of the devastation caused by Hurricane Rita. The states of Louisiana and Texas further requested that the temporary housing of the displaced individuals in low-income units without regard to income not cause the owners to lose LIHTCs. Based upon these requests and because of the widespread damage to housing caused by Hurricane Rita, the IRS issued Notice 2006-11. Click here for a copy of the notice.

Montgomery, Ala. - February 1, 2006

Last month, the Alabama Housing Finance Authority (AHFA) board of directors approved an addendum to the 2006 low-income housing tax credit (LIHTC) qualified allocation plan (QAP) to facilitate the allocation and use of additional LIHTCs authorized by H.R. 4440, the Gulf Opportunity Act, and related provisions allowing enhanced eligible basis under certain circumstances and adjusting the applicable gross median income in non-metropolitan areas. To view the addendum, click here.

Novogradac & Company LLP will host a Hurricane Katrina workshop in New Orleans in March. Stay tuned for details about the exact date and location.

Austin, Texas - January 31, 2006

The Texas Department of Housing and Community Affairs (TDHCA) today announced that its Hurricane Rita low-income housing tax credit (LIHTC) policy, updated Procedures Manual and related materials are available online at: www.tdhca.state.tx.us/lihtc.htm. The deadline for the first set of documentation, as further described in the policy, is February 21, 2006. Questions regarding TDHCA’s Hurricane Rita policy may be directed to Sharon Gamble at 512.475.4610.

January

Washington, D.C. - January 30, 2006

The U.S. Department of Agriculture (USDA) Rural Housing Service last week published a request for proposals for loan guarantees under the Section 538 Guaranteed Rural Rental Housing Program (GRRHP) for Fiscal Year (FY) 2006. Funding for the Section 538 program in FY 2006 is $99 million. The notice outlines the timeframes, eligibility requirements, lender responsibilities and the overall response and application processes. Click here for a copy of the notice. Analysis of the program and how it can be used in combination with low-income housing tax credits (LIHTCs) will be featured in the March issue of the LIHTC Monthly Report.

Washington, D.C. - January 24, 2006

The Internal Revenue Service (IRS) today issued a new publication today explaining changes to the tax law and relief provisions available to those affected by hurricanes Katrina, Rita and Wilma. Publication 4492, Information for Taxpayers Affected by Hurricanes Katrina, Rita and Wilma lists the disaster areas for each hurricane and explain which areas are eligible for administrative relief from the IRS and which areas receive special tax breaks under recently enacted provisions of the tax law.

Sacramento, Calif. - January 19, 2006

The California Tax Credit Allocation Committee (TCAC) today published the final regulations for its low-income housing tax credit (LIHTC) program for 2006. Applications for the first round of LIHTC allocations are due March 23. Novogradac & Company will present an LIHTC application workshop in Los Angeles on March 2 and in San Francisco on March 3.

Austin, Texas - January 17, 2006

The Texas Department of Housing and Community Affairs (TDHCA) will hold application workshops this week to help area counties and eligible nonprofit organizations apply for approximately $10 million in federal and state disaster relief funds available to aid the region repair or replace homes damaged by Hurricane Rita. An additional $3.5 million in low-income housing tax credits (LIHTCs) will also be available for allocation to qualified private developers. Click here for more information about the workshops.

Miami - January 12, 2006

Affordable housing and community development industry experts gathered yesterday at a special meeting to discuss H.R. 4440, The Gulf Opportunity Zone Act of 2005, legislation passed late last year that included an increase in low-income housing tax credit (LIHTC) authority and other important provisions to aid in rebuilding the housing stock damaged or destroyed by hurricanes Katrina, Rita and Wilma, and other matters relevant to the recovery of the Gulf Coast region. Click here for a copy of the presentation from the Special Meeting to Discuss Legislation Hurricane Relief, held in conjunction with the 12th Annual Tax Credit Developers Conference.

Washington, D.C. - January 12, 2006

The U.S. Department of Housing and Urban Development (HUD) today published a final governing the renewal of Section 8 project-based assistance contracts, except renewal as part of a restructuring plan in the Mark-to-Market program. Currently, contracts are being renewed under the authority of an interim rule. Today’s final rule becomes effective February 13, 2006.

Sacramento, Calif. - January 11, 2006

The California Tax Credit Allocation Committee (TCAC) today published proposed revisions to its regulations for the 2006 low-income housing tax credit (LIHTC) program. TCAC will consider adopting the proposed regulations at its next meeting on January 18, 2006.

Sacramento, Calif. - January 11, 2006

The California State Board of Equalization adopted new final rules for not-for-profit managing general partners of affordable housing for property tax exemption purposes, including projects funded with low-income housing tax credits (LIHTCs). The rules will not become effective until 2007, but should be considered by partnerships completing LIHTC projects in late 2006.

Washington, D.C. - January 9, 2006

The ownership of a mixed-income housing property by two partnerships — one owning the affordable units and another owning the market rate units — will not cause the property to fail to qualify as a qualified residential rental property under Section 142 of the Internal Revenue Code, according to the Internal Revenue Service (IRS) in private letter ruling 200601021. Click here for more information.