Low-Income Housing Tax Credit:
News Archive
2007
December
IRS INVITES COMMENTS ON FORM 8609
WASHINGTON, D.C.- December 28, 2007
The Department of the Treasury and the Internal Revenue Service (IRS), as part of a continuing effort to reduce paperwork and respondent burden, today invited public comments concerning Form 8609, Low-Income Housing Credit Allocation Certification and 8609-A, Annual Statement of Low-Income Housing Credit. Owners of residential low-income rental buildings may claim a low-income housing tax credit (LIHTC) for each qualified building over a 10-year credit period. Forms 8609 and 8609-A are used to obtain an LIHTC allocation from the housing credit agency. There are no changes being made to the forms at this time. Written comments should be received on or before February 26, 2008. Click here for more information.
IRS RULES INDIAN HOUSING BLOCK GRANT PAYMENTS NOT GRANTS FOR PURPOSES OF SECTION 42
WASHINGTON, D.C.- December 27, 2007
The Internal Revenue Service (IRS) in Revenue Ruling 2008-6 today announced that it has determined that certain rental assistance payments made under the Department of Housing and Urban Development's (HUD') Indian Housing Block Grant program are not federal grants for purposes of the low-income housing tax credit (LIHTC) under Section 42 of the Internal Revenue Code.
CONGRESS CHANGES STUDENT ELIGIBILITY RULES FOR LIHTC PROGRAM
WASHINGTON, D.C.- December 20, 2007
Congress this week passed legislation that would change the student eligibility rules for the low-income housing tax credit (LIHTC) program. H.R. 3648, the Mortgage Forgiveness Debt Relief Act of 2007, included a provision that was originally introduced as S. 1241 by Sen. Charles Grassley, R-Iowa. The amendment would amend the Internal Revenue Code (IRC) to allow certain full-time students who are single parents and their children to live in housing units eligible for LIHTC housing, provided that their children are not dependents of another individual (other than a parent of such children). Currently, IRC Section 42(i)(3)(D)(ii) provides that a unit occupied entirely by full-time students would continue to be a qualified low-income unit only if those full-time students were single parents and their children none of which could be claimed as a dependent of another individual or if the full-time students were married and filing a joint tax return. H.R. 3648 is now slated to be sent to the White House for signature by the President.
CONGRESS MOVES TO EXCLUDE BAH FROM INCOME CALCULATIONS
WASHINGTON, D.C.- December 20, 2007
Legislation to help military families gain access to affordable housing passed the Senate last week. S. 839, the Military Access to Housing Act of 2007, was introduced as an amendment to H.R. 3997, the Defenders of Freedom Tax Relief Act of 2007. To make housing financed by low-income housing tax credits (LIHTC) available to low-income service members, the proposal excludes a service member's basic allowance for housing (BAH) from income when determining income eligibility for LIHTC. Under current law, BAH is counted as income when determining eligibility for affordable housing, even though the BAH is not counted as income for tax purposes. The House and Senate this week worked to resolve differences over the final measure. Click here for more information.
TCAC POSTS FINAL REVISIONS TO PROPOSED BASIS LIMITS FOR 2008
SACRAMENTO, Calif.- December 19, 2007
The California Tax Credit Allocation Committee (TCAC) yesterday posted a final iteration of proposed changes to program basis limits. This version incorporates data from 2007 funded TCAC applications receiving either 9 percent or 4 percent low-income housing tax credits (LITHCs) for new construction projects. In a memo, TCAC says the limits in the 9 percent and 4 percent tables constitute the final version staff would use if the committee adopts the proposed new basis limit methodology. TCAC is scheduled to consider the proposed change at its January 23, 2008 meeting.
November
GRANTS AVAILABLE FOR STATE, LOCAL HOUSING PRESERVATION LEADERS
CHICAGO - November 27, 2007
The John D. and Catherine T. MacArthur Foundation announced recently that it plans to provide $35 million in new funding for innovative public sector initiatives to preserve and improve the existing stock of privately owned affordable rental housing. The foundation has invited state and local governments to submit letters of interest by January 29, 2008 after which a limited number of applicants may be invited to submit full proposals. The foundation says it expects to select up to 10 states and localities to receive awards including grants and/or program-related investments ranging from $250,000 to $5 million. Eligible expenditures may include collection of relevant housing data, market studies, personnel costs, reasonable compensation to third-party consultants, the provision of financing and other outlays that fulfill the charitable purpose of providing housing affordable to low-income families and/or stimulating community and economic development. Click here for more information.
HUD REVISES RENT RULES FOR PBV UNITS RECEIVING LIHTCS
WASHINGTON, D.C. - November 19, 2007
The U.S. Department of Housing and Urban Development today published a final rule that revises the low-income housing tax credit (LIHTC) rent provisions of HUD's Project-Based Voucher (PBV) program regulations. The rule reinstates the provision that the LIHTC rent does not serve as a cap on rents in PBV projects receiving LIHTCs. The rule also re-emphasizes that public housing authorities (PHAs) may not enter into assistance contracts until HUD, or an independent entity approved by HUD, has conducted the required subsidy layering review and determined that the assistance is in accordance with HUD requirements.
To hear more of the latest LIHTC developments or to learn more about HUD programs, join Novogradac & Company LLP in Las Vegas November 29-30 for the Tax Credit Housing Finance Conference, which will feature a panel on combining LIHTC equity and HUD subsidies.
Or join us January 10-11, 2008 in Sunny Isles Beach, Fla. for the 14th Annual Tax Credit Developers Conference, where the agenda features a HUD track focused on partnering with HUD, combining LIHTC equity with HUD subsidies and a special roundtable discussion led by developers who will share their experiences including case studies and success stories.
October
LIHTC PROPERTIES MAY RENT VACANT UNITS TO HOUSEHOLDS DISPLACED BY SO. CALIF. FIRES
SACRAMENTO, Calif. - October 26, 2007
The California Tax Credit Allocation Committee (TCAC) yesterday published a memo to inform owners of low-income housing tax credit (LIHTC) properties of the disaster relief procedures issued by the Internal Revenue Service (IRS) earlier this year. In Revenue Procedure 2007-54, the IRS establishes a procedure for temporary relief from certain requirements of Section 42 of the Internal Revenue Code (IRC) for owners of LIHTC buildings and LIHTC agencies of states or possessions of the United States in major disaster areas declared by the president. On October 24, President George W. Bush declared a major disaster exists in California and ordered federal aid to supplement state and local recovery efforts in Los Angeles, Orange, Riverside, San Bernardino, San Diego, Santa Barbara, and Ventura counties. Under Rev. Proc. 2007-54, property owners are allowed to temporarily rent vacant LIHTC units to qualified low-income households and may rely on a displaced low-income individual's self-certification of income. TCAC says that owners may also elect to give priority to disaster-affected low-income households, if they so choose.
HUD PUBLISHES OCAFs FOR 2008
WASHINGTON, D.C. - October 25, 2007
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 2008. 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).
HOUSE BILL INCLUDES SMALL INCREASE IN CERTAIN STATES’ LIHTC CEILINGS
WASHINGTON, D.C. - October 23, 2007
Ways and Means Committee Chairman Rep. Charles B. Rangel, D-N.Y., yesterday introduced H.R. 3920, the Trade and Globalization Assistance Act of 2007. This legislation would overhaul the current Trade Adjustment Assistance (TAA) program and creates new benefits and tax incentives for industries and communities that have been hit hard by trade, including a small increase in the state low-income housing tax credit (LIHTC) ceiling of states with manufacturing redevelopment zones. The LIHTC ceiling would be increased by the housing credits that are allocated to manufacturing redevelopment zones. The maximum credit ceiling increase that would be permitted under the bill is capped at $20 per person located within such a manufacturing redevelopment zone. The bill will be considered tomorrow by the Ways and Means Committee.
IRS ANNOUNCES INFLATION ADJUSTED LIHTC, BOND CAPS FOR 2008
WASHINGTON, D.C. - October 19, 2007
The Internal Revenue Service (IRS) yesterday announced in Revenue Procedure 2007-66 the inflation-adjusted low-income housing tax credit (LIHTC) and private activity bond caps for 2008. For calendar year 2008, the amount used under § 42(h)(3)(C)(ii) to calculate the state LIHTC is the greater of $2 multiplied by the state population or $2,325,000. The amount used under §146(d)(1) to calculate the state ceiling for the volume cap for private activity bonds in 2008 is the greater of $85 multiplied by the state population or $262,095,000. Click here to view Rev. Proc. 2007-66.
IRS HOLDS HEARING ON PROPOSED QUALIFIED CONTRACT REGULATIONS
WASHINGTON, D.C. - October 18, 2007
The Internal Revenue Service (IRS) this week held a public hearing on proposed changes to qualified contract provisions in Internal Revenue Code (IRC) Section 42 that were issued on June 19. A panel that included representatives from the IRS’ Office of Associate Chief Counsel, Passthroughs and Special Industries and the Treasury Department’s Office of Tax Policy, heard from four witnesses: Richard Goldstein, representing the Affordable Housing Tax Credit Coalition; Miriam Colon, representing the New York City Department of Housing Preservation and Development; David Rammler, representing the National Housing Law Project; and Scott Kline, representing the National Housing Trust and Enterprise Preservation Corporation. Click here for a transcript of the hearing. Click here for copies of comment letters submitted to the IRS on the proposed qualified contract regulations.
IRS INVITES COMMENTS ON STATE LIHTC CEILING, OTHER RULES
WASHINGTON, D.C. - October 11, 2007
The Internal Revenue Service (IRS) today invited comments from the general public concerning Treasury Decision (T.D.) 8563, State Housing Credit Ceiling. T.D. 8563 provides rules relating to the order in which low-income housing tax credit (LIHTC) dollar amounts are allocated from each state's LIHTC ceiling under Section 42(h)(3)(C) of the Internal Revenue Code (IRC) and the determination of which states qualify to receive credit from a national pool of credit under IRC Section 42(h)(3)(D). There are no changes being made to the existing regulation at this time; the invitation to comment was issued 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 through December 10, 2007.
HUD PUBLISHES 2008 FAIR MARKET RENTS
WASHINGTON, D.C. - October 1, 2007
The U.S. Department of Housing and Urban Development today published final fiscal year 2007 fair market rents (FMRs), effective today. 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.
Join Novogradac & Company LLP to discuss this and other recent developments affecting the affordable housing industry at the 14th Annual San Francisco Affordable Housing Conference on October 4 and 5. Or, to discuss what the new FMRs mean for your LIHTC property, sign up for the LIHTC Property Compliance Workshop & LIHTC Property Manager Certification Exam on October 4 and 5 in San Francisco.
September
TEXAS AGENCY INVITES COMMENTS ON LIHTC AMENDMENT POLICY
AUSTIN, Texas - September 24, 2007
The Texas Department of Housing and Community Affairs today announced the publication of a proposed low-income housing tax credit (LIHTC) amendment policy and invited public input. TDHCA says the policy is intended only to clarify which amendments will be processed administratively and which amendments will require board approval; the policy is not intended to address rule-related issues such as penalties. Comments relating to penalties are encouraged and will be accepted through October 15, 2007. Click here for more information.
HUD DESIGNATES 2008 DIFFICULT DEVELOPMENT AREAS
WASHINGTON, D.C. - September 18, 2007
The U.S. Department of Housing and Urban Development (HUD) today designated difficult development areas (DDAs) 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 are eligible for up to 30 percent more LIHTC subsidy than projects not located in DDAs. Today's notice indicates that the designations of qualified census tracts (QCTs) published September 28, 2007, remain in effect.
Join Novogradac & Company LLP to discuss this and other recent developments affecting the affordable housing industry at the 14th Annual San Francisco Affordable Housing Conference on October 4 and 5.
THE U.S. HOUSE OF REPRESENTATIVES PASSES H.R. 1908
WASHINGTON, D.C. - September 10, 2007
The U.S. House of Representatives passed H.R. 1908, The Patent Reform Act of 2007 on September 7. The act would prohibit the award of new and pending patents for tax planning methods, an issue that has been watched closely by tax stakeholders. H.R. 1908 now moves to Congress for review.
August
IRS TO EVALUATE QUALIFIED 501(C)(3) BOND COMPLIANCE
WASHINGTON, D.C. - August 22, 2007
The Internal Revenue Service (IRS) announced this week that its Office of Tax Exempt Bonds (TEB) and the Exempt Organizations Compliance Area (EOCA) initiated a joint effort to evaluate the policies and procedures used by 501(c)(3) exempt organizations to ensure the post-issuance tax compliance of their tax-exempt debt obligations. The IRS says it will send compliance check questionnaires to more than 200 exempt organizations, indicating an outstanding balance on their 2005 Form 990, Return of Organization Exempt from Income Tax. Click here for more information.
TREASURY RELEASES 2007-08 TAX PRIORITY GUIDANCE PLAN
WASHINGTON, D.C. - August 13, 2007
The Treasury Department today released its 2007-2008 Priority Guidance Plan. The 2007-2008 Priority Guidance Plan contains 303 projects to be completed over a 12-month period, from July 2007 through June 2008. Among the projects planned under “general tax issues,” the Treasury Department indicates it will issue final regulations under Internal Revenue Code Section 42 on applicable utility allowances as well as final regulations under Section 42 on the requirements for a qualified contract. In addition to the items on this year's plan, an appendix lists the more routine guidance that is published each year, such as monthly rulings setting applicable federal rates and tax credit percentages. Copies of the 2007-08 Priority Guidance Plan can be obtained from the Treasury Department web site.
IRS ANNOUNCES LIHTC ALLOCATIONS TO NATIONAL POOL
WASHINGTON, D.C. - August 13, 2007
The Internal Revenue Service (IRS) today published the amounts of unused low-income housing tax credit (LIHTC) carryovers for calendar year 2007 that were allocated to 40 qualified states under Internal Revenue Code §42(h)(3)(D). Revenue Procedure 2007-55 details how $6.375 million of unused LIHTCs were divided among the states in the national pool. California received the largest allocation of $851,151 in LIHTCs.
To discuss the latest developments in the LIHTC industry, join Novogradac & Company LLP and industry leaders at the 14th Annual San Francisco Affordable Housing Conference on October 4 and 5.
TAX SIMPLIFICATION TALKS MULL CUTS TO TAX PREFERENCES SUCH AS LIHTC
WASHINGTON, D.C. - August 9, 2007
In a press conference today, President George W. Bush told reporters he is in the "very early stages of discussion" about cutting corporate tax rates and said the idea surfaced as a result of meetings being held at the Treasury Department about business taxation and global competitiveness. A background paper prepared for those meetings and released last month concluded that the top corporate tax rate could drop from 35 percent to 27 percent if lawmakers eliminated a number of provisions in the Internal Revenue Code, including the Section 199 manufacturing deduction, the research and development tax credit, Subpart F deferral, and the low-income housing tax credit (LIHTC).
To discuss the possible effects of tax reform proposals on the future of affordable housing, join Novogradac & Company LLP and industry leaders at the Developing Thriving Communities: Federal & State Tax Credits Drive Sustainable Outcomes conference September 6 and 7 in St. Louis or the 14th Annual San Francisco Affordable Housing Conference on October 4 and 5.
BOND FUNDS AVAILABLE FOR AFFORDABLE HOUSING IN AUSTIN
AUSTIN, Texas - August 9, 2007
The Austin Housing Finance Corporation (AHFC) this week published a notice of funding availability (NOFA) for its Rental Housing Development Assistance (RHDA) program through which $2.2 million in affordable housing general obligation (GO) bond proceeds are available to assist in financing the development of affordable rental housing projects. The bonds were approved by voters in November. Proposition 5 authorized the issuance of $55 million in GO bonds, including $33 million for the RHDA program and $22 million for homeownership programs. Applications are due by September 18. Applications not considered may be re-submitted for the next funding cycle which will be October 1, 2007.
BILL INTRODUCED TO MODERNIZE LIHTC PROGRAM
WASHINGTON, D.C. - August 2, 2007
Rep. Jim McDermott, D-Wash., this week introduced legislation to modernize the Low Income Housing Tax Credit (LIHTC) program, ensuring that affordable housing developments will be able to effectively leverage federal rental and operating subsidies. H.R. 3260 would exempt federal rental and operating subsidies from treatment as federal grants for the purposes of calculating tax credit basis. Supporters say this will better equip affordable housing developers to combine LIHTCs with other federal resources, including those under the McKinney-Vento Homeless Assistance Programs and the Section 811 Disabled Housing program, among others.
To discuss the progress of this and other legislative proposals of interest to affordable housing professionals, join Novogradac & Company LLP for the 14th Annual San Francisco Affordable Housing Conference on October 4 and 5.
July
IRS GIVES ADDITIONAL LIHTC RELIEF TO PROPERTIES IN GO ZONE
WASHINGTON, D.C. - July 30, 2007
The Internal Revenue Service (IRS) last week released an advance copy of Notice 2007-66, which provides an extension of time under Section 42(j)(4)(E) of the Internal Revenue Code for the restoration of low-income housing tax credit (LIHTC) projects located within the Gulf Opportunity Zone (GO Zone) that were damaged by Hurricane Katrina.
CALIF. AGENCY RECEIVES 110 APPLICATIONS FOR LIHTCS
SACRAMENTO, Calif. - July 26, 2007
The California Tax Credit Allocation Committee (TCAC) announced that for its second allocation round of 2007, it had received 110 applications for 9 percent federal low-income housing tax credits (LIHTCs) and seven applications for 4 percent federal credits plus state LIHTCs. TCAC has posted a list of applicants and other information on its web site: www.treasurer.ca.gov/ctcac.
HOUSE COMMITTEE DISCUSSES AFFORDABLE HOUSING TRUST FUND BILL
WASHINGTON, D.C. - July 23, 2007
The House Financial Services Committee last week held a hearing to discuss H.R. 2895, the National Affordable Housing Trust Fund Act of 2007. H.R. 2895 was introduced by committee chairman Rep. Barney Frank, D-Mass., and Reps. Maxine Waters, D-Calif., Gary Miller, R-Calif., John McHugh, R-N.Y., and Jim Ramstad, R-Minn., with the goal of producing, rehabilitating and preserving 1.5 million housing units in the next 10 years.
Click here to view a webcast of the hearing and access copies of prepared testimony submitted to the committee.
HOUSE COMMITTEE APPROVES LANGUAGE PROHIBITING TAX PATENTS
WASHINGTON, D.C. - July 19, 2007
The House Judiciary Committee yesterday approved language that would prohibit patents of tax planning methods. The ban was proposed by Rep. Rick Boucher, D-Va., and approved by the committee as an amendment to H.R. 1908, the Patent Reform Act of 2007. H.R. 1908 passed the committee by a voice vote. Boucher's amendment defines a tax planning method as "a plan, strategy, technique or scheme that is designed to reduce, minimize, or defer" a taxpayer's tax liability. Click here for more information about patenting tax strategies.
HUD UPDATES MULTIFAMILY OCCUPANCY HANDBOOK
WASHINGTON, D.C. - July 17, 2007
The U.S. Department of Housing and Urban Development (HUD) recently released Change 2 to Handbook 4350.3 REV-1, “Occupancy Requirements of Subsidized Multifamily Housing Programs.” This handbook provides guidance for owners, management agents, residents, contract administrators and HUD staff on the admission and continued occupancy for households in project-based subsidized housing units. Look for a description and analysis of the changes to the handbook in the August issue of the Property Compliance Report.
HUD PUBLISHES PROPOSED 2008 FAIR MARKET RENTS
WASHINGTON, D.C. - July 12, 2007
The U.S. Department of Housing and Urban Development (HUD) today published proposed fair market rents (FMRs) for fiscal year 2008. FMRs are used to determine payment standard amounts for the Housing Choice Voucher program, project-based Section 8 contracts and housing assistance payments (HAP) contracts in the moderate rehabilitation Single Room Occupancy (SRO) program. HUD will accept public comments on the proposed FMRs through August 13, 2007.
REPORTABLE TRANSACTION RULES FOR TAX-EXEMPT ENTITIES ISSUED
WASHINGTON, D.C. - July 5, 2007
The Internal Revenue Service (IRS) today issued guidance effective July 6 regarding how, under Internal Revenue Code (IRC) Section 4965, excise taxes apply in prohibited tax shelter transactions involving tax-exempt third parties. In Treasury Decision (TD) 9334, the IRS sets final and temporary rules relating to the requirement of a return to accompany payment of excise taxes. TD 9335 provides temporary rules regarding the form, manner and timing of disclosure obligations with respect to prohibited tax shelter transactions involving tax-exempt third parties. The IRS also released a notice of proposed rulemaking relating to entity-level and manager-level excise taxes with respect to prohibited tax shelter transactions to which tax-exempt entities are parties.
IRS UPDATES GUIDANCE FOR LIHTC PROPERTIES IN DISASTER AREAS
WASHINGTON, D.C. - July 2, 2007
The Internal Revenue Service (IRS) today provided an advance copy of Revenue Procedure 2007-54, which establishes a procedure for temporary relief from certain requirements of Section 42 of the Internal Revenue Code (IRC) for owners of low-income housing tax credit (LIHTC) buildings and LIHTC agencies of states or possessions of the United States in major disaster areas declared by the president. Rev. Proc. 2007-54 supersedes the relief provisions of Rev. Proc. 95-28. Rev. Proc. 2007-54 will be formally published in Internal Revenue Bulletin 2007-31, on July 30, 2007.
This and other guidance of interest to affordable housing professionals will be discussed at Novogradac & Company LLP’s 14th Annual San Francisco Affordable Housing Conference, October 4-5.
June
AFFORDABLE HOUSING TRUST FUND INTRODUCED
WASHINGTON, D.C. - June 28, 2007
House Financial Services Committee Chairman Barney Frank, D-Mass., along with Reps. Maxine Waters, D-Calif., John McHugh, R-N.Y., and Jim Ramstad, R-Minn., today introduced legislation with the goal of producing, rehabilitating and preserving 1.5 million housing units over the next 10 years. H.R. 2895 would initially allocate between $800 million and $1 billion annually to states and local communities, without increasing government spending or the federal deficit. The National Affordable Housing Trust Fund would be funded with monies from the proposed GSE Affordable Housing Fund (H.R.1427), Federal Housing Administration savings that result from the enactment of the Expanding American Homeownership Act (H.R.1852), and any other sources of funds subsequently identified. The bill would allocate 60 percent of the funds directly to local communities, with the remainder to be granted to states, insular areas and Indian Tribes. The Financial Services Committee will hold a hearing to discuss H.R. 2895 on July 12.
TCAC ANNOUNCES NEW DRAFT BASIS LIMITS
SACRAMENTO, Calif. - June 19, 2007
Following public forums held in March and April, the California Tax Credit Allocation Committee (TCAC) announced last week that its staff has developed a draft set of basis limits for the low-income housing tax credit (LIHTC) program using a new methodology. TCAC says its staff is using data that is more relevant than the federal Section 221(d)(3) limits to establish reasonable development cost maximums for establishing basis limits. Click here to read a description of the methodology used to develop the new limits. Additional information is also posted online at www.treasurer.ca.gov/CTCAC/.
IRS PROPOSES NEW UTILITY ALLOWANCE, QUALIFIED CONTRACT REGS
WASHINGTON, D.C. - June 18, 2007
The Internal Revenue Service (IRS) today released proposed regulations to amend the utility allowances rules for the low-income housing tax credit (LIHTC) under Section 42 of the Internal Revenue Code (IRC). According to IRS, the proposed rules, established in response to concerns that the existing regulations need updating, provide additional options for estimating tenant utility costs. A hearing on the proposed utility regulation changes will be held October 9 and written comments will be accepted until September 17.
And in other breaking news, the IRS also today released proposed regulations regarding the qualified contract rules in IRC Section 42. The IRS says the proposed regulations contain guidance concerning taxpayers' requests to LIHTC agencies to obtain a qualified contract for the acquisition of an LIHTC building. Written comments on the proposed qualified contract regulations will be accepted until September 17 and a public hearing is slated for October 15.
Both proposed regulations will be formally published in tomorrow's Federal Register.
PRESIDENT BUSH SIGNS HUD 2530 LEGISLATION
WASHINGTON, D.C. - June 18, 2007
On Friday, June 15, President George W. Bush signed into law H.R. 1675, the Preservation Approval Process Improvement Act of 2007. H.R. 1675, which passed the Senate on May 24 and the House on April 24, addresses concerns with the filing process for U.S. Department of Housing and Urban Development (HUD) Form 2530, Previous Participation Certification. The new law exempts limited liability corporate investors from being required to file Form 2530 and allows for continued paper filings for those required to file until such time that technical issues with the Active Partners Performance System (APPS) filing system are resolved.
HOUSE SUBCOMMITTEE TO CONSIDER WAYS TO STRENGTHEN HOPE VI
BATON ROUGE, La. - June 14, 2007
Rep. Maxine Waters, D-Calif., chair of the House Financial Services Subcommittee on Housing and Community Opportunity today announced that the subcommittee will hold a hearing on June 21 to examine ways to improve and strengthen the HOPE VI program by identifying areas for reform.
LHFA EXTENDS CARRYOVER, 10 PERCENT TEST DEADLINES
WASHINGTON, D.C. - June 15, 2007
In its board meeting yesterday, the Louisiana Housing Finance Agency (LHFA) extended the carryover and 10 percent test deadline from July 1, 2007 to September 30, 2007 for projects that received both a low-income housing tax credit (LIHTC) allocation and U.S. Department of Housing and Urban Development (HUD) Community Development Block Grant (CDBG) piggy-back funds. HUD Secretary Alphonso Jackson applauded the move, saying LHFA's action greatly enhances the ability of the Housing Authority of New Orleans (HANO), currently under HUD control, to continue its efforts to build affordable housing at C. J. Peete, B. W. Cooper, St. Bernard and the Lafitte public housing developments, four public housing communities that suffered damage after Hurricane Katrina rendering a majority of them uninhabitable.
RULE PROPOSED TO ALLOW USE OF INDIAN HOUSING BLOCK GRANT FUNDS IN LIHTC PROJECTS
WASHINGTON, D.C. - June 8, 2007
The U.S. Department of Housing and Urban Development (HUD) today proposed a rule would amend the Indian Housing Block Grant (IHBG) program regulations to specify the conditions under which IHBG funds may be used for project-based or tenant-based rental assistance and clarify that IHBG funds may be used for project-based or tenant-based rental assistance that is administered in a manner consistent with Section 8. In the notice, HUD notes that today’s proposed rule is necessary in order to begin the process of requesting Internal Revenue Service (IRS) approval for the combination of IHBG funds with low-income housing tax credits (LIHTCs). HUD says the proposed rule, when promulgated in final form, will allow for such determination to be made. Click here for more information.
IRS INVITES COMMENTS ON FORM 8877, REQUEST FOR WAIVER OF ANNUAL INCOME RECERTIFICATION
WASHINGTON, D.C. - June 4, 2007
The Internal Revenue Service (IRS) today invited comments concerning Form 8877, Request for Waiver of Annual Income Recertification Requirement for the Low-Income Housing Credit. Owners of low-income housing tax credit (LIHTC) buildings that are 100 percent occupied by low-income tenants may use Form 8877 to request a waiver from the annual recertification of income requirements, as provided by Internal Revenue Code Section 42(g)(8))(B). There are no changes being made to the form at this time; the invitation to comment was issued 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 through August 3, 2007. Click here for more information.
May
TCAC PROPOSES CHANGES TO REGULATIONS REGARDING STATE LIHTCS
SACRAMENTO, Calif. - May 29, 2007
The California Tax Credit Allocation Committee (CTCAC) announced last week that it will hold a public hearing on June 13 regarding proposed amendments to the low-income housing tax credit (LIHTC) qualified allocation plan (QAP). The existing regulations mandate that applicants for federal 9 percent LIHTCs must be offered and must accept state credits in the order in which they were awarded credits during the competitive process. TCAC says this language allows no administrative latitude to account for the particular circumstances surrounding a specific project, or the application pool as a whole, and that administrative latitude in the state credit exchange exercise would serve the public interest by allowing efficiencies while maximizing the effectiveness of all tax credit resources. Click here for more information.
SENATE PASSES GO ZONE LIHTC EXTENSION, HUD 2530 RELIEF
WASHINGTON, D.C. - May 25, 2007
Following House approval earlier in the day, the Senate last night passed a supplemental spending bill for the military that contained provisions related to the use of low-income housing tax credits (LIHTCs) in the Gulf Opportunity Zone (GO Zone). Specifically, the measure extends until December 31, 2010 the placed-in-service deadlines for properties that received an allocation of LIHTCs within the GO Zone, and Rita and Wilma GO Zones in 2006, 2007 or 2008, extends to December 31, 2010 the difficult development area (DDA) designations in the GO Zone, and allows properties in these zones that are placed-in-service by December 31, 2010 to use 9 percent LIHTCs with "disaster relief" Community Development Block Grant (CDBG) funds loaned at below-market rates.
The Senate last night also passed H.R. 1675, the Preservation Approval Process Improvement Act of 2007. H.R. 1675, which passed the full House of Representatives on April 24, addresses concerns with the filing process for U.S. Department of Housing and Urban Development (HUD) Form 2530, Previous Participation Certification. The measure would exempt limited liability corporate investors from being required to file Form 2530 and would allow for continued paper filings for those required to file until such time that technical issues with the Active Partners Performance System (APPS) filing system are resolved.
Both measures will now be sent to the White House for President Bush's signature.
To discuss the progress of other legislative proposals of interest to affordable housing professionals, join Novogradac & Company LLP for the 14th Annual San Francisco Affordable Housing Conference on October 4 and 5.
WAYS & MEANS: TESTIMONY ON HOUSING INCENTIVES AVAILABLE
WASHINGTON, D.C. - May 24, 2007
The House Ways and Means Select Revenue Subcommittee today heard testimony from three panels of witnesses on certain tax incentives for affordable housing, including the low-income housing tax credit (LIHTC), Section 142 tax-exempt bonds (TEBs) and the Section 47 rehabilitation credit. The first panel included officials from the U.S. Department of Housing and Urban Development (HUD) and Treasury Department, the second panel featured state housing agency representatives and a final panel included several industry experts. Click here for a complete list of witnesses and links to their written remarks. A video recording of the hearing will also be posted shortly.
To learn more about the latest developments and issues in the programs discussed in today’s testimony, join Novogradac & Company LLP, October 4-5, for the 14th Annual San Francisco Affordable Housing Conference.
IRS INVITES COMMENT ON LIHTC CARRYOVER ALLOCATION RULES
WASHINGTON, D.C. - May 23, 2007
The Internal Revenue Service (IRS) today invited comments concerning T.D. 8520, Carryover Allocations and Other Rules Relating to the Low-Income Housing Credit. The regulations in T.D. 8520 provide guidance regarding eligibility for a carryover allocation of the low-income housing tax credit (LIHTC), procedures for electing an appropriate percentage month, the general public use requirement, the utility allowance to be used in determining gross rent, and the inclusion of the cost of certain services in gross rent. No changes to the regulations have been proposed at this time; the invitation to comment was issued 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 should be received on or before July 23, 2007 to be assured of consideration. Click here for more information.
SUBCOMMITTEE ON SELECT REVENUE MEASURES TO HOLD HEARING ON LIHTC, TEB, REHABILITATION CREDIT
WASHINGTON, D.C. - May 17, 2007
House Ways and Means Select Revenue Subcommittee Chairman Richard Neal, D-Mass., today announced a May 24 hearing on certain tax incentives for affordable housing, including the low-income housing tax credit (LIHTC), section 142 tax-exempt bonds (TEBs), and the section 47 rehabilitation credit. The hearing will focus on ways to simplify and modify certain low-income housing programs that are established in the Internal Revenue Code and in programs administered by the U.S. Department of Housing and Urban Development (HUD) to ensure greater efficiency and better coordination of federal housing programs. Oral testimony will be limited to members of the House. Individuals and organizations may submit written statements for consideration by the committee and for inclusion in the printed record of the hearing. Novogradac & Company LLP will send a follow-up email when the complete invited witness list is released.
SENATE BANKING, HOUSING AND URBAN AFFAIRS COMMITTEE PASSES H.R. 1675
WASHINGTON, D.C. - May 16, 2007
The Senate Banking, Housing and Urban Affairs Committee today passed H.R. 1675, the Preservation Approval Process Improvement Act of 2007. H.R. 1675, which passed the full House of Representatives on April 24, addresses concerns with the filing process for U.S. Department of Housing and Urban Development (HUD) Form 2530, Previous Participation Certification. The measure would exempt limited liability corporate investors from being required to file Form 2530 and would allow for continued paper filings for those required to file until such time that technical issues with the Active Partners Performance System (APPS) filing system are resolved. There were no objections to the bill, which will now be reported to the Senate floor for a vote. An industry supported sign-on letter can be found online at www.taxcreditcoalition.org
AHTTCC ANNOUNCES WINNERS OF TAX CREDIT EXCELLENCE AWARDS
WASHINGTON, D.C. - May 11, 2007
The Affordable Housing Tax Credit Coalition (AHTCC) today announced the winners of its 13th Annual Charles L. Edson Tax Credit Excellence Awards. AHTCC received 48 entries from low-income housing tax credit (LIHTC) properties in 23 states. The Edson awards celebrate the best in affordable rental housing development in four categories: metropolitan/urban housing, rural housing, special needs housing and senior housing. AHTCC awarded four LIHTC properties first place awards and ten LIHTC properties received honorable mentions.
IRS INVITES COMMENTS ON LIHTC COMPLIANCE REGULATIONS
WASHINGTON, D.C. - May 10, 2007
The Internal Revenue Service (IRS) today invited comments concerning existing final regulations, Treasury Decision (T.D.) 8430, T.D. 8521 and TD 8859. T.D. 8430 requires state low-income housing tax credit (LIHTC) allocation plans to provide a procedure for state and local LIHTC agencies to monitor for compliance with the requirements of Internal Revenue Code (IRC) Section 42 and report any noncompliance to the IRS. T.D. 8521 concerns the Secretary of the Treasury's authority to provide guidance under IRC Section 42 and allows state and local LIHTC agencies to correct administrative errors and omissions made in connection with allocations of LIHTC dollar amounts and recordkeeping within a reasonable period after their discovery. T.D. 8859 amends the procedures for state and local LIHTC agencies' compliance monitoring and the rules for state and local LIHTC agencies' correction of administrative errors or omissions. There is no change to these existing regulations at this time; the comments are invited part of the Treasury Department’s continuing effort to reduce paperwork and respondent burden required by the Paperwork Reduction Act of 1995. Comments should be received on or before July 9, 2007 to be assured of consideration.
HUD REVISES RENT RULES FOR PBV UNITS RECEIVING LIHTCS
WASHINGTON, D.C. - May 1, 2007
The U.S. Department of Housing and Urban Development today proposed a rule that would revise the low-income housing tax credit (LIHTC) rent provisions of HUD's Project Based Voucher (PBV) program rule. The rule, which was published on October 13, 2005, and took effect on November 14, 2005, capped PBV rents at the LIHTC rent in buildings with LIHTC units, even in cases where HUD formerly permitted such units to receive the higher rents permitted under the PBV program. After giving the issue further consideration, HUD now proposes to revert to the regulations in effect prior to the October 13, 2005 final rule that did not necessarily require public housing agencies (PHAs) to cap section 8 maximum rents at the LIHTC rent. Click here for more information. Comments on this proposal will be accepted until July 2, 2007.
To discuss this proposal, as well as the latest legislation and other matters of interest to the LIHTC and tax-exempt housing bond industry, join industry expert at Novogradac & Company LLP’s Credit & Bond Financing Conference, May 17-18, 2007 in New Orleans, La.
SUPPLEMENTAL SPENDING BILL TO INCLUDE GO ZONE LIHTC EXTENSION
WASHINGTON, D.C. - April 23, 2007
Congressional conference committee members are scheduled to meet today regarding the conference report for H.R. 1591, a supplemental appropriations for fiscal year 2007, which includes a $4.8 billion small business tax package. House and Senate committee members came to an agreement last week on the tax package that includes an extension until December 31, 2010 of the placed-in-service deadline for low-income housing tax credits (LIHTCs) in the Gulf Opportunity (GO) Zone. The conference report could be heard on the House and Senate floors later this week. If President George W. Bush vetoes the conference report as promised, it is expected that a modified supplemental version of the legislation would follow.
This legislation and other topics related to reconstruction in the GO Zone will be discussed at Novogradac & Company LLP’s upcoming GO Zone Forum on May 15-16.
At the national level, the latest legislative proposals and matters of interest to the LIHTC and tax-exempt housing bond industry and Credit & Bond Financing Conference, May 17-18, 2007 in New Orleans, La.
April
HUD SETS BASIC STATUTORY MORTGAGE LIMITS FOR MULTIFAMILY HOUSING PROGRAMS IN 2007
WASHINGTON, D.C. - April 10, 2007
In accordance with Section 206A of the National Housing Act, the U.S. Department of Housing and Urban Development (HUD) has adjusted the basic statutory mortgage limits for multifamily housing programs for calendar year 2007. Click here for a copy of the updated limits.
IRS CHIEF COUNSEL ISSUES GO ZONE GUIDANCE
WASHINGTON, D.C. - April 3, 2007
The Internal Revenue Service (IRS) Chief Counsel Office issued a notice outlining limited relief for satisfying the requirements for making a carryover allocation of low-income housing tax credit (LIHTC) amounts under Internal Revenue Code §42 (h)(1)(E) or (F) in the Gulf Opportunity Zone (GO Zone) by the close of the 2006 calendar year. CC-2007-010 explains that the IRS learned that a state in the GO Zone encountered administrative difficulties in making allocations from its LIHTC cap for the 2006 calendar year and given the unique nature of the problems in the GO Zone and the administrative complexities associated with the initial allocation of LIHTC from the cap, the IRS says it will consider carryover allocations intended to be made from the 2006 cap that satisfy IRC §1.42-6(d)(2)(i) through (x), but were signed and dated by January 31, 2007, as having been made by the close of the 2006 calendar year.
To discuss the progress of the rebuilding efforts in the GO Zone, join Novogradac & Company LLP in New Orleans May 15-16 at the GO Zone Forum.
HUD UPDATES LIHTC DATABASE
WASHINGTON, D.C. - April 2, 2007
The U.S. Department of Housing and Urban Development's (HUD) Low-Income Housing Tax Credit (LIHTC) Database has been updated and now contains information on more than 25,000 properties and more than 1.4 million housing units placed in service between 1987 and 2004. The LIHTC database includes project addresses, numbers of units and low-income units, number of bedrooms, year the credit was allocated, year the project was placed in service, whether the project was new construction or rehab, type of credit provided and other information on project financing. The database has been geocoded, enabling researchers to look at the geographical distribution and neighborhood characteristics of tax credit projects.
March
HOUSE COMMITTEE APPROVES BILL ADDRESSING HUD 2530 CONCERNS
WASHINGTON, D.C. - March 29, 2007
Today the House Financial Services Committee passed, without amendment, H.R. 1675, the Preservation Approval Process Improvement Act of 2007. H.R. 1675 was introduced by Reps. Melissa Bean, D-Ill., and Paul Gillmor, R-Ohio, to address concerns with the filing process for U.S. Department of Housing and Urban Development (HUD) Form 2530, Previous Participation Certification. The measure would exempt limited liability corporate investors from being required to file Form 2530 and would allow for continued paper filings for those required to file until technical issues with the Active Partners Performance System (APPS) filing system are resolved. Also at this morning’s hearing, committee chairman Rep. Barney Frank, D-Mass., introduced into the record an industry sign-on letter in support of H.R. 1675, spearheaded by the Affordable Housing Tax Credit Coalition and National Leased Housing Association.
To hear the latest developments and legislative progress for this and other issues important to affordable housing professionals, join Novogradac & Company LLP in New Orleans May 17-18 at the Credit & Bond Financing for Affordable Housing Conference. Register for both the Credit & Bond Financing Conference and the GO Zone Forum May 15-16 and receive 15% off the early bird registration price.
HOUSE PASSES KATRINA HOUSING TAX RELIEF ACT
WASHINGTON, D.C. - March 28, 2007
The House of Representatives yesterday approved by unanimous vote H.R. 1562, the Katrina Housing Tax Relief Bill of 2007, legislation that extends the placed-in-service deadline for housing developments low-income housing tax credits (LIHTCs) in the Gulf Opportunity (GO) Zone for two years, until December 31, 2010.
This legislation and other topics related to reconstruction in the GO Zone will be the focus of Novogradac & Company LLP’s upcoming GO Zone Forum on May 15-16, 2007 in New Orleans, La.
HOUSE COMMITTEE PASSES KATRINA HOUSING TAX RELIEF ACT
WASHINGTON, D.C. - March 22, 2007
The House Ways and Means Committee yesterday by voice vote approved H.R.1562, the "Katrina Housing Tax Relief Act of 2007." The bill would make several changes to rules governing tax incentives for rebuilding in the Gulf Opportunity Zone (GO Zone), including extending for two years, until December 31, 2010, the placed-in-service deadline for low-income housing tax credits (LIHTCs). The committee approved H.R. 1562 after approving two amendments — one that would offset the 10-year, $237 million cost of the bill, and a second, offered by Rep. Kenny C. Hulshof, R-Mo., that would require the Government Accountability Office (GAO) to issue a report examining how the tax incentives are being utilized by state and local governments within one year of the bill’s enactment. Click here for more information.
This legislation and other topics related to reconstruction in the GO Zone will be the focus of Novogradac & Company LLP’s upcoming GO Zone Forum on May 15-16, 2007 in New Orleans, La.
HUD RELEASES INCOME LIMITS FOR 2007
WASHINGTON, D.C. - March 20, 2007
The Department of Housing and Urban Development (HUD) today released income limits for 2007 effective March 20, 2007. Click here for links to median family income, income limits and accompanying information and tables from HUD.
Novogradac & Company LLP is updating its Rent & Income Limit Calculator© to include 2007 data and new features. Subscribers to the Industry Alert E-mail service will receive an email announcement when we have completed the update to our web site.
To discuss the latest changes to the rent and income limits, join Novogradac & Company LLP at the Tax Credit Property Compliance Workshop May 17-18, 2007 in New Orleans, La.
KATRINA HOUSING BILL EXTENDS PROVISIONS FOR GO ZONE LIHTCS
WASHINGTON, D.C. - March 20, 2007
Reps. Charles B. Rangel, D-N.Y., and Jim McCrery, R-La., chairman and ranking member of the Committee on Ways and Means respectively, last night introduced H.R. 1562, the “Katrina Housing Tax Relief Act of 2007.” The bill would make several changes to rules governing tax incentives for rebuilding in the Gulf Opportunity Zone (GO Zone), including extending for two years, until December 31, 2010, the placed-in-service deadline for low-income housing tax credits (LIHTCs) and modifying the carryover allocation rule for certain buildings that are placed in service before January 1, 2011. H.R. 1562 is slated for mark-up by the full committee tomorrow. In preparation for the hearing, the Joint Committee on Taxation has released a description of the bill’s provisions as well as estimated revenue effects.
This legislation and other topics related to reconstruction in the GO Zone will be the focus of Novogradac & Company LLP’s upcoming GO Zone Forum on May 15-16, 2007 in New Orleans, La.
HOUSE COMMITTEE EXAMINES GO ZONE TAX CREDIT ISSUES
WASHINGTON, D.C. - March 14, 2007
The House Ways and Means Oversight Subcommittee yesterday held hearing on issues related to the use of low-income housing tax credits (LIHTC) in the states in the Gulf Opportunity (GO) Zone. Milton Bailey, president of the Louisiana Housing Finance Agency (LHFA), and Dianne Bolen, executive director of Mississippi Home Corporation (MHC), spoke regarding obstacles to timely and appropriate redevelopment in these areas and discussed possible options for facilitating recovery, including the need for an extension of the placed-in-service deadline for LIHTC properties to December 31, 2010. Click here for copies of their remarks. According to observer accounts of yesterday’s hearing, subcommittee chairman Rep. John Lewis, D-Ga., and ranking member Rep. Jim Ramstad, R-Minn., expressed support for extending the deadline.
These issues and other topics related to the reconstruction will be the focus of Novogradac & Company LLP’s upcoming GO Zone Forum on May 15-16, 2007 in New Orleans, La.
HUD PUBLISHES 2007 SUPERNOFA
WASHINGTON, D.C. - March 12, 2007
The U.S. Department of Housing and Urban Development (HUD) today published the 38 notices of funding of opportunity (NOFAs) that constitute its FY2007 SuperNOFA. Through the FY2007 SuperNOFA, HUD is making available approximately $2.4 billion in federal financial assistance. HUD published the general section of the FY2007 SuperNOFA on January 18, in advance of the individual NOFAs, to give prospective applicants sufficient time to begin preparing their applications and to register early with grants.gov in order to facilitate the application submission process.
Join Novogradac & Company LLP at the GO Zone Forum May 15-16, and the Credit & Bond Financing Conference, May 17-18, 2007 in New Orleans, La.
IRS PLANS GUIDANCE ON UTILITY ALLOWANCES, DISASTER RELIEF, QUALIFIED CONTRACTS
WASHINGTON, D.C. - March 12, 2007
The Internal Revenue Service (IRS) today announced an update to its 2006 - 2007 Priority Guidance Plan. The plan published in August 2006 contained 264 projects to be completed between July 2006 and the end of June 2007. Today’s update includes 59 items of additional guidance, some of which have been published already. On page 12 of the guide, the IRS lists three items under Section 42 relating to the low-income housing tax credit (LIHTC) for which it plans to issue guidance, including guidance regarding applicable utility allowances for LIHTC properties, an update of Revenue Procedure 95-28 regarding relief from certain LIHTC requirements for properties affected by major disasters, and proposed regulations regarding the requirements for a qualified contract.
Join Novogradac & Company LLP at the GO Zone Forum May 15-16, and the Credit & Bond Financing Conference, May 17-18, 2007 in New Orleans, La. to discuss this guidance and other issues important to the LIHTC and tax-exempt bond industries.
IRS RELEASES UPDATED POPULATION FIGURES FOR LIHTC, BOND CAP CALCULATIONS
WASHINGTON, D.C. - March 12, 2007
In Notice 2007-23, the Internal Revenue Service (IRS) today released new population figures for calculating the 2007 population-based component of states’ low-income housing tax credit (LIHTC) ceilings, 2007 volume caps and the 2007 volume limit. Under Revenue Procedure 2006-53, each state’s LIHTC ceiling in 2007is the greater of $1.95 multiplied by the state population or $2,275,000. Each state’s 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 for a copy of Notice 2007-23.
HUD TO RELEASE 2007 INCOME LIMITS APPROXIMATELY MARCH 19
WASHINGTON, D.C. - March 9, 2007
The U.S. Department of Housing and Urban Development announced today on its HUD USER web site that it expects to release income limits for 2007 around March 19. As soon as the new income limits are released, Novogradac & Company LLP will update its Rent & Income Limit Calculator© to include 2007 data.
To discuss the latest changes to the rent and income limits, join Novogradac & Company LLP at the Tax Credit Property Compliance Workshop, May 17-18, 2006 in New Orleans, La.
HOUSE COMMITTEE TO HOLD HEARING ON LIHTC ISSUES IN THE GO ZONE
WASHINGTON, D.C. - March 6, 2007
Rep. John Lewis, D-Ga., chairman of the House Ways and Means Oversight Subcommittee, today announced his intention to hold a hearing on housing tax issues related to the redevelopment of areas affected by hurricanes Katrina, Rita and Wilma. In response to the extensive damage caused these hurricanes in 2005, Congress provided additional low-income housing tax credits (LIHTCs) and other funding for the states in the Gulf Opportunity (GO) Zone. The subcommittee hearing is expected examine the obstacles to timely and appropriate redevelopment in these areas and discuss possible options for facilitating recovery. For background on some of the obstacles and proposals for facilitating recovery, read Novogradac & Company LLP's Article of the Month and the Washington Wire for March.
These issues will also be the focus of Novogradac & Company LLP’s upcoming GO Zone Forum on May 15-16, 2007 in New Orleans, La.
HUD REDEFINES EFFECTIVE DATE FOR QCTS AND DDAS
WASHINGTON, D.C. - March 6, 2007
In a notice published in today’s Federal Register, the U.S. Department of Housing and Urban Development (HUD) revises the definition of “effective date” in a September 28, 2006 notice designating 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. The notice establishes a definition of “multiphase” LIHTC developments and specifies how effective dates in notices designating DDAs and QCTs are to be applied to such developments, particularly when DDA or QCT designations change between phases. Click here for more information.
February
IRS INVITES COMMENT ON FORM 8703, ANNUAL CERTIFICATION OF A RESIDENTIAL RENTAL PROJECT
WASHINGTON, D.C. - February 28, 2007
The Internal Revenue Service (IRS) today invited comments on Form 8703, Annual Certification of a Residential Rental Project. Form 8703 is used by the operator of a residential rental project to provide annual information that the IRS will use to determine whether a project continues to be a qualified residential rental project under Internal Revenue Code Section 142(d). No changes are being made to the form at this time; comments should be received on or before April 30, 2007 to be assured of consideration.
LEGISLATION INTRODUCED TO INCREASE EFFICIENCY OF HISTORIC TAX CREDIT
WASHINGTON, D.C. - February 28, 2007
On February 14, Sens. Blanche L. Lincoln, D-Ark., Gordon H. Smith, R-Ore., and Mary Landrieu, D-La., introduced S. 584 the Community Restoration and Revitalization Act of 2007, the companion bill to H.R. 1043. The legislation would make improvements to the historic rehabilitation tax credit program to allow it to be used more effectively with the low-income housing tax credit (LIHTC).
CALIF. PUBLISHES UPDATED QAP, CDLAC ANNOUNCES 2007 BOND CAP
SACRAMENTO, Calif. - February 22, 2007
The California Tax Credit Allocation Committee (TCAC) today posted an updated qualified allocation plan (QAP) for its low-income housing tax credit (LIHTC) program. Also, yesterday state treasurer Bill Lockyer announced that in 2007 California will issue as much as $3.1 billion in tax-exempt bond financing for affordable housing, industrial development projects and college student loans.
IRS INVITES COMMENTS ON TAX-EXEMPT BOND FORMS
WASHINGTON, D.C. - February 22, 2007
The Internal Revenue Service (IRS) today invited comments concerning Form 8038, Information Return for Tax-Exempt Private Activity Bond Issues, Form 8038-G, Information Return for Tax-Exempt Governmental Obligation, and Form 8038-GC, Information Return for Small Tax-Exempt Governmental Bond Issues, Leases and Installment Sales. Issuers of state or local bonds must comply with certain information reporting requirements contained in Internal Revenue Code (IRC) Section 149 to qualify for tax exemption; Forms 8038, 8038-G and 8038-GC are used to provide the IRS with the information required by IRC Section 149 and to monitor the requirements of IRC sections 141 through 150. There are no changes being made to the forms at this time; 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. Written comments should be received on or before April 23, 2007 to be assured of consideration.
CALIF. AGENCY TO HOLD MEETINGS ON TRANSIT ORIENTED BOND FUNDS
Sacramento, Calif. - February 20, 2007
Proposition 1C, a state bond measure approved by voters in November, includes $300 million in funding for transit oriented development (TOD), including both loans for housing and grants for housing-related infrastructure. As part of the process for developing a program to use these funds, the California Department of Housing and Community Development (HCD) will conduct a series of stakeholder meetings in March to solicit input from local government, developers, and other interested parties on the design of the program, and to share HCD's preliminary thoughts on this matter. Parties interested in attending are asked RSVP by emailing Donella Moran.
CALIFORNIA RELEASES REVISED LIHTC REGULATIONS, NEW APPLICATION PROTOCOL, 2007 SET-ASIDE ESTIMATES
Sacramento, Calif. - February 14, 2007
The California Tax Credit Allocation Committee (TCAC) yesterday published a summary of comments received and final proposed changes to California’s qualified allocation plan (QAP) and program regulations for its low-income housing tax credit (LIHTC) in 2007. The proposed regulation changes, as revised, will be recommended for action at TCAC’s February 21, 2007 meeting. TCAC also announced new application submittal protocols and released preliminary estimates of the LIHTC amounts to be available under various set-aside categories in 2007.
TCAC is offering two one-day application training workshops; one in Anaheim on February 23 and another in Sacramento on February 27.
Novogradac & Company LLP is also offering a California Tax Credit Application Workshop on Friday, March 2 in Los Angeles.
AHTCC RELEASES TENTATIVE LEGISLATIVE PRIORITIES FOR 2007
Washington, D.C. - February 13, 2007
At its 2007 Annual Meeting in Key West, Fla., the Affordable Housing Tax Credit Coalition (AHTCC) presented a list of tentative legislative priorities for the 110th Congress. The list of priorities includes points that have been introduced in previous legislation, issues that have been discussed by the industry for possible action and several new proposals. AHTCC says it will continue to work with other industry groups to achieve these priorities and address any other issues which may arise affecting the low-income housing tax credit (LIHTC) program.
IRS PUBLISHES GUIDANCE ON SECTION 4965
Washington, D.C. - February 7, 2007
The Internal Revenue Service (IRS) today provided guidance to tax-exempt entities described in Internal Revenue Code (IRC) Section 4965 regarding whether they are parties to a prohibited tax shelter transaction under IRC Section 4965. Notice 2007-18 states that pursuant to Revenue Procedure 2007-20, transactions in which the refundable or contingent fee is related to tax credits under IRC Sections 42 and 45D will not be treated as reportable transactions for purposes of Treas. Reg. § 1.6011-4(b)(4) and, thus, will not be subject to Section 4965. In addition, Notice 2007-18 invites comments from the public regarding all aspects of Section 4965.
WHITE HOUSE PROPOSES HUD BUDGET FOR FY 2008
Washington, D.C. - February 5, 2007
President George W. Bush’s proposed budget for fiscal year (FY) 2008 seeks $35.2 billion for the U.S. Department of Housing and Urban Development (HUD), a $1.6 billion, or 4.5 percent, increase over the proposal for FY 2007. The proposal again places a strong emphasis on promoting homeownership, but also includes increases in funding for rental housing. The request includes $16 billion for tenant-based rental assistance including HUD's Housing Choice Voucher Program, a nearly $582 million increase over FY 2006 levels. HUD says this request will allow it to renew all existing rental housing assistance contracts. The FY 2008 budget proposes to fund the Community Development Block Grant (CDBG) Program at $3 billion.
In the budget proposal summary, HUD says it is proposing leveraged financing demonstration projects in both Section 202 and Section 811; $25 million is requested for Section 202 and $15 million is requested for Section 811. The main goal is to increase the production of units serving these special needs populations by removing the barriers that discourage low-income housing tax credit (LIHTC) applicants from utilizing Sections 202 and 811. In developing the program, HUD will consider mixed-finance arrangements, including low-income housing tax credits and “other creative financing options for development and, or rental operating assistance.”
Click here for more information on the FY 2008 budget proposal.
IRS INVITES COMMENTS ON APPLICATION FOR TAX-EXEMPT STATUS
Washington, D.C. - February 1, 2007
The Internal Revenue Service (IRS) today invited comments from not-for-profit organizations seeking exemption under certain parts of Internal Revenue Code (IRC) Section 501(c). These organizations are required to submit a letter of application that the IRS uses to determine whether the organization meets the legal requirements for tax-exempt status. In addition, the IRS says information will be used to delete certain information from the text of an adverse determination letter or ruling before it is made available for public inspection, as required under IRC Section 6110. Written comments should be received on or before April 2, 2007 to be assured of consideration. Click here for more information on submitting comments.
HUD ANNOUNCES 2007 ANNUAL ADJUSTMENT FACTORS
Washington, D.C. - February 1, 2007
The U.S. Department of Housing and Urban Development (HUD) today published revised Annual Adjustment Factors (AAFs) for adjustment of Section 8 contract rents for specified programs. These AAFs apply to housing assistance payment contract anniversaries for calendar months commencing after today. Click here for more information.
January
GAO REMOVES HUD RENTAL HOUSING PROGRAMS FROM HIGH-RISK WATCH LIST
Washington, D.C. - January 31, 2007
The Government Accountability Office (GAO) today removed the U.S. Department of Housing and Urban Development (HUD) single-family mortgage insurance and rental housing assistance programs from the list of areas identified as “high-risk.” In 1994, GAO identified all HUD programs as high risk because of “fundamental management and organizational problems that put billions of dollars in insured mortgages and housing and community development assistance at risk.” In 2001, GAO narrowed the high risk designation to HUD’s single-family mortgage insurance and rental housing assistance programs. In its report today, GAO says sufficient progress has been made to remove the high-risk designation from these as well.
IRS EXEMPTS LIHTC AND NMTC TRANSACTIONS FROM REPORTABLE TRANSACTION DISCLOSURE RULES
Washington, D.C. - January 26, 2007
In Revenue Procedure 2007-20, the Internal Revenue Service exempts certain transactions with contractual protection from the disclosure rules under § 1.6011-4(b)(4) of the Income Tax Regulations. The American Jobs Creation Act (AJCA), which became effective October 22, 2004, included important changes to the Internal Revenue Code that had potentially chilling effects on general partners and/or developers of low-income housing tax credit (LIHTC), historic rehabilitation tax credit (HTC) or new markets tax credit (NMTC) partnerships, or properties that previously were thought exempt from reporting as tax shelters under IRC § 6111. Rev. Proc. 2007-20 exempts LIHTC and NMTC transactions, but HTC transactions were not exempted. This revenue procedure also applies for purposes of IRC § 4965.
To discuss the significance of this important development, join Novogradac & Company LLP at its upcoming conferences:
May 17-18 in New Orleans
Credit and Bond Financing Conference
June 6-8 in Washington, D.C.
6th Annual Spring New Markets Tax Credit Conference & Workshops
IRS INVITES COMMENT ON ARBITRAGE REBATE FORM
Washington, D.C. - January 25, 2007
The Internal Revenue Service (IRS) today invited comments concerning Form 8038-T, Arbitrage Rebate and Penalty in Lieu of Arbitrage Rebate. Form 8038-T is used by issuers of tax exempt bonds to report and pay the arbitrage rebate and to elect and/or pay various penalties associated with arbitrage bonds. Written comments should be received on or before March 26, 2007. Click here for more information.
Don't forget to mark your calender for Novogradac & Company LLP's Credit and Bond financing Conference to be held in New Orleans, May 16-18. Your invitation will be arriving soon.
IRS ANNOUNCES COMPLIANCE WORKSHOP FOR TAX-EXEMPT ORGANIZATIONS
Washington, D.C. - January 23, 2007
The Internal Revenue Service (IRS) yesterday announced the launch of a new Internet-based version of its Exempt Organizations Workshop covering tax compliance issues confronted by small and mid-sized tax-exempt organizations, including charities and churches. The free online workshop, Stay Exempt – Tax Basics for 501(c)(3)s, consists of five interactive modules on tax compliance topics: tax-exempt status; unrelated business income; employment issues; Form 990; and required disclosures. Each module contains learning objectives as well as interactive exercises. Click here for more information.
HUD PUBLISHES GENERAL SECTION FOR 2007 SUPERNOFA
Washington, D.C. - January 18, 2007
The U.S. Department of Housing and Urban Development (HUD) today published a notice in an effort to provide prospective applicants for HUD competitive funding with the opportunity to become familiar with the general section of HUD's fiscal year 2007 Super Notice of Funding Availability (NOFA), in advance of its publication. Today’s notice also includes a list of programs anticipated to be in the FY2007 SuperNOFA, subject to the availability of funds. HUD plans to publish its annual SuperNOFA early in 2007. Click here for more information.
IRS RELEASES UPDATED 8823 GUIDE
Washington, D.C. - January 12, 2007
The Internal Revenue Service (IRS) this week issued an updated version of its Guide for Completing Form 8823: Low-Income Housing Credit Agencies Report of Noncompliance or Building Disposition. The document presents standardized operational definitions for the noncompliance categories listed on Form 8823 and is intended to provide consistent interpretation and application of Internal Revenue Code (IRC) Section 42 requirements among states and consistent reporting of noncompliance.
TCAC PROPOSES CHANGES TO LIHTC PROGRAM
SACRAMENTO, Calif. - January 8, 2007
The California Tax Credit Allocation Committee (TCAC) today announced recommended regulation changes to its low-income housing tax credit (LIHTC) program for 2007. TCAC says there are four substantive changes to the regulations as well as a number of other changes that are meant clarify provisions that were problematic in 2006. TCAC staff will hold public hearings in Sacramento, Oakland and Los Angeles where interested persons can express their views on the proposed regulations. Written comments will also be accepted until 5 p.m. on January 31, 2007. TCAC staff intends to bring final proposed regulation changes before committee for adoption at its February 14, 2007 meeting.
IRS INVITES COMMENTS ON FORM 8610, SCHEDULE A
WASHINGTON, D.C. - January 8, 2007
The Internal Revenue Service (IRS) today announced that were 3 line items deleted on Form 8610 Annual Low-Income Housing Credit Agencies Report and invited comments on Form 8610 and Schedule A (Form 8610) Carryover Allocation of Low-Income Housing Credit. State housing agencies are required by Internal Revenue Code Section 42(l)(3) to report annually the amount of low-income housing tax credits (LIHTCs) that they allocated to qualified buildings during the year. Housing agencies report carryover allocations to the IRS on Schedule A (Form 8610). Form 8610 is a transmittal and reconciliation document for Forms 8609, Schedule A (Form 8610), binding agreements and election statements.
KENTUCKY HOUSING TO HOST APPLICATION WORKSHOP
LEXINGTON, Ky. - January 3, 2007
The Kentucky Housing Corporation (KHC) finance and construction department is offering two-day rental housing production application training on January 24 and 25. The training will focus on providing detailed information and instructions on the new rental housing production web-based application. Additional topics that will be discussed at the training include: changes to the qualified allocation plan (QAP) for low-income housing tax credits (LIHTC); scoring criteria for all KHC rental housing production funding sources, including LIHTCs, compliance issues; design and plan review; reviewing of the underwriting models and credit reviews; ribbon cutting and groundbreakings; asset management; service plans; and more. There is no cost for attending the training. Click here for more information, or to register online.