Low-Income Housing Tax Credits:

News Archive

2008

December

N.Y. GOVERNOR SUGGESTS LIHTC CHANGES FOR RECOVERY PACKAGE

WASHINGTON, D.C. - December 30, 2008

New York Gov. David Paterson yesterday sent a letter to President-elect Barack Obama and Vice President-elect Joe Biden that offers an agenda for federal aid to states to be included in a comprehensive economic recovery package. In addition to suggesting $500 billion in aid to states and families and $300 billion for infrastructure investments, the letter also asks that recovery legislation offer a number of provisions that would provide state housing agencies with relief on low-income housing tax credit (LIHTC) regulations to make the LIHTC more appealing to investors. Many of the suggestions in the letter are similar to proposals endorsed by the Affordable Housing Tax Credit Coalition, as discussed in the December 23, 2008 Tax Credit Tuesday podcast.

There is still time to join Novogradac & Company in Miami for the 15th Annual Tax Credit Developers Conference on January 8-9. The event features expert panel discussions that will discuss the latest on these and other proposals being considered in Congress for an economic recovery package and what they will mean for the future of LIHTC development, as well as an update on the LIHTC equity market from active investors and syndicators and much more.  

Paterson’s letter will also be discussed in more detail in the next Tax Credit Tuesday podcast. Tune in on January 6, 2009 to learn more about the LIHTC proposals that could be included an economic recovery package being considered by Congress.

HUD ISSUES NOTICE ABOUT 2009 NOFAs

WASHINGTON, D.C. - December 29, 2008

The U.S. Department of Housing and Urban Development (HUD) today issued a notice that provides prospective applicants for HUD's competitive funding with the opportunity to become familiar with the General Section of HUD's fiscal year (FY) 2009 notices of funding availability (NOFAs). HUD also announced that this year it will publish its NOFAs as they are approved for publication, rather than in a combined SuperNOFA, as it has done in previous years. To assist applicants in this transition, HUD published an anticipated schedule for release of the FY 2009 NOFAs in Appendix A of today’s notice. Click here for more information.

OBAMA NAMES NOMINEE FOR HUD SECRETARY

WASHINGTON, D.C. - December 15, 2008

In his weekly address, president-elect Barack Obama announced on Saturday that he will nominate Shaun Donovan to be secretary of the Department of Housing and Urban Development (HUD). Donovan is a former Commissioner of Housing Preservation and Development in New York City.

Tune in to tomorrow’s Tax Credit Tuesday podcast to hear more about Donovan’s nomination and its significance to the low-income housing tax credit community.

November

IRS PROVIDES GUIDANCE FOR LIHTCS, BONDS IN DISASTER AREAS

WASHINGTON, D.C. - November 26, 2008

The Internal Revenue Service (IRS) yesterday released Notice 2008-109, which provides guidance with respect to state volume limits applicable to allocations of the low-income housing tax credits (LIHTCs) in the Midwestern and Hurricane Ike disaster areas, the issuance of tax-exempt bonds for the Midwestern and Hurricane Ike disaster areas, and the issuance of tax credit bonds for the Midwestern disaster areas. Notice 2008-109 also provides a list of the counties that qualify as Midwestern or Hurricane Ike disaster areas and provides the portion of the state population located in the disaster or other relevant areas for purposes of determining the volume limits applicable to each of these provisions.

IRS GIVES GUIDANCE ON 9 PERCENT APPLICABLE PERCENTAGE FLOOR

WASHINGTON, D.C. - November 13, 2008

According to guidance released today by the Internal Revenue Service (IRS), the new 9 percent applicable percentage floor enacted according to the Housing Assistance Tax Act of 2008 can be applied to a low-income housing tax credit (LIHTC) property even if a taxpayer had made an irrevocable election on or before July 30, 2008 to apply to an applicable percentage less than 9 percent. In Notice 2008-106, the IRS provides clarification on using the new 9 percent minimum applicable percentage for non-federally subsidized new buildings that are placed in service after July 30, 2008 and before December 31, 2013 that is provided under Section 3002(a)(1)  of the new law.

October

IRS ANNOUNCES INFLATION ADJUSTED LIHTC, BOND CAPS FOR 2009

WASHINGTON, D.C. - October 20, 2008

The Internal Revenue Service (IRS) last week announced in Revenue Procedure 2008-66 the inflation-adjusted low-income housing tax credit (LIHTC) and private activity bond caps for 2009. For calendar year 2009, the amount used under § 42(h)(3)(C)(ii) to calculate the state LIHTC is the greater of $2.30 multiplied by the state population or $2,665,000. 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 $90 multiplied by the state population or $273,270,000. Click here to view Rev. Proc. 2008-66.

 

IRS ANNOUNCES LIHTC ALLOCATIONS TO NATIONAL POOL

WASHINGTON, D.C. - October 14, 2008

The Internal Revenue Service (IRS) today published the amounts of unused low-income housing tax credit (LIHTC) carryovers for calendar year 2008 that were allocated to 28 qualified states under Internal Revenue Code §42(h)(3)(D). Revenue Procedure 2008-57 details how $4.158 million of unused LIHTCs were divided among the states in the national pool. Texas received the largest allocation of $518,587 in LIHTCs.

 

IRS INVITES COMMENTS ON DISASTER RELIEF GUIDANCE

WASHINGTON, D.C. - October 9, 2008

The Internal Revenue Service today invited comments on Notice 2008-58 and Notice 2008-61 in which it provides guidance related to emergency housing relief in the Midwest. In the notices, the IRS suspends certain requirements under section 42 of the Internal Revenue Code for low-income housing credit projects in an effort to expand the availability of housing for disaster victims and their families in the wake of severe storms, tornadoes and flooding in Iowa and Wisconsin. Click here for more information. No changes are being made to the regulation at this time and comments will be accepted until December 8.

NEW LAW TO PERMIT BIFURCATION OF STATE, FEDERAL LIHTC IN CALIFORNIA

SACRAMENTO, Calif. - October 7, 2008

California Gov. Arnold Schwarzenegger on September 27 signed into law S.B. 585, a measure to permit the bifurcation of state and federal low-income housing tax credits (LIHTCs). Under the new law, low-income housing projects that receive a preliminary tax credit reservation from the California Tax Credit Allocation Committee (TCAC) between January 1, 2009 and December 31, 2015 will now be able to assign the state credits among partners separate from the assignment of the federal LIHTCs, regardless of the proportionate ownership share of the respective partners. Click here to read a memo from TCAC regarding the new law.

HOUSE APPROVES RESCUE BILL WITH RETC, NMTC, LIHTC PROVISIONS

WASHINGTON, D.C. - October 3, 2008

The House today voted 263 to 171 to approve H.R. 1424, the Emergency Economic Stabilization Act of 2008, as amended by the Senate earlier this week. In addition to addressing concerns of the stability of the economy and financial system, H.R. 1424 extends the production tax credit (PTC) for wind energy for one year, the investment tax credit (ITC) for solar energy projects for eight years and the new markets tax credit (NMTC) for one year. The bill also provides additional low-income housing tax credit (LIHTC) authority for disaster relief in the Midwest as well as in Texas and Louisiana. Click here for a summary of the energy, extenders and disaster tax provisions included in the Emergency Economic Stabilization Act of 2008.

An additional $8 per capita in LIHTC authority is provided for 2008, 2009 and 2010 for the Midwestern Disaster Area. H.R. 1424 also provides an additional $16 per capita in LIHTC authority for 2008, 2009 and 2010 to areas affected by Hurricane Ike, which include Chambers, Galveston, Jefferson and Orange counties in Texas and Calcasieu and Cameron parishes in Louisiana.

The White House has expressed strong support for the bill and President George W. Bush is expected to sign it into law promptly.

IRS ISSUES GUIDANCE FOR RECAPTURE BOND PROVISIONS OF HOUSING ACT

WASHINGTON, D.C. - October 2, 2008

The Internal Revenue Service (IRS) today issued guidance for taxpayers who are maintaining a surety bond or a Treasury Direct Account (TDA) to satisfy the low-income housing tax credit recapture exception in Section 42(j)(6) of the Internal Revenue Code (IRC), as in effect on or before July 30, 2008. Revenue Procedure 2008-60 provides the procedures for taxpayers to follow when making the election under Section 3004(i)(2)(B)(ii) of the Housing Assistance Tax Act of 2008 to no longer maintain a surety bond or a TDA to avoid recapture.

September

HUD PUBLISHES FINAL 2009 FAIR MARKET RENTS

WASHINGTON, D.C. - September 29, 2008

The U.S. Department of Housing and Urban Development today published final fiscal year 2009 fair market rents (FMRs). 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. The FMRs published today are effective on October 1, 2008.

SENATE APPROVES ADDITIONAL LIHTCS FOR DISASTER RELIEF

WASHINGTON, D.C. - September 24, 2008

The Senate yesterday approved by a vote of 93-2 a package of disaster relief measures and tax extenders including additional low-income housing tax credit (LIHTC) authority for certain states. The proposal allows states in the Midwestern disaster area to allocate an additional $8 per capita in LIHTCs in 2008, 2009 and 2010. The $150 billion Senate proposal was a substitute to H.R. 6049, which was a version of tax extenders approved by the House earlier this year. The bill will now be returned to the House for consideration.

To follow the progress of this bill in Congress, tune in to the Novogradac Report on Tax Credits, a weekly podcast presented each Tax Credit Tuesday.

IRS ISSUES GUIDANCE ON BOND, BAH PROVISIONS OF HOUSING ACT

WASHINGTON, D.C. - September 17, 2008

The Internal Revenue Service (IRS) today published Notice 2008-79, which provides guidance regarding certain provisions of the Housing Assistance Tax Act of 2008 affecting tax-exempt bonds and related matters. The notice provides guidance on allocations, carryforwards, information reporting and uses of the additional bond volume cap provided by the Housing Act. In addition, the notice provides guidance regarding the provision in the Housing Act that allows low-income housing tax credit (LIHTC) and TEB financed properties to disregard basic housing allowance payments at certain military bases for purposes of applicable low-income set-aside income limitations. The notice also lists military instillations that are deemed to be qualified military installations for the purposes of that provision. The IRS says it will update the list of qualified bases if it receives additional information indicating that other military installations should receive the same treatment.

For a summary of the full range of changes made by the new law to the LIHTC program, download a replay of Novogradac and Company's Affordable Housing Webinar on the 2008 Housing Act. The latest tax credit developments will also be discussed by industry experts at the Multi Credit Conference, October 1-3 in St. Louis.

FHFA STATEMENT ON GSEs' LIHTC PORTFOLIOS

WASHINGTON, D.C. - September 12, 2008

The Federal Housing Finance Agency (FHFA) today released a statement of support for the multifamily housing finance activities of government sponsored entities (GSEs) Fannie Mae and Freddie Mac while they are in conservatorship. FHFA says it recognizes the importance of all aspects of the GSEs’ multifamily businesses—including the low-income housing tax credit (LIHTC) area and liquidity facilities for remarketed mortgage revenue bonds—for a healthy secondary market and housing affordability. In its statement FHFA says it does not expect either company to liquidate its portfolio of LIHTC or mortgage-revenue bonds.

LIHTC PROFESSIONALS REQUEST GUIDANCE ON HOUSING ACT

WASHINGTON, D.C. - September 12, 2008

A group of affordable housing professionals yesterday joined efforts to request guidance on several of the provisions of the Housing and Economic Recovery Act of 2008 that affect the low-income housing tax credit (LIHTC). In a letter to the Internal Revenue Service and Treasury Department, the group requests guidance on several issues to insure compliance under the LIHTC program, including the determination of credit rate, the modifications to the definition of eligible basis, clarification of the treatment of federal grants, the exception to the 10-year prior placement in service rule, and the repeal of the bond posting requirement.

Additional information about the LIHTC provisions of the Housing Act can be found in the Journal of Tax Credit Housing, the Tax Credit Tuesday podcasts and the recording of the Affordable Housing Webinar on the 2008 Housing Act.

TREASURY, IRS RELEASE 2008-2009 PRIORITY GUIDANCE PLAN

WASHINGTON, D.C. - September 11, 2008

The Treasury Department and Internal Revenue Service (IRS) yesterday released the 2008-2009 Priority Guidance Plan, which contains 314 projects that are scheduled for completion from July 2008 through June 2009. The plan includes final regulations under Internal Revenue Code 42 on the requirements for a qualified contract; proposed regulations on this issue were published June 19, 2007. The plan also lists guidance under the Housing Assistance Tax Act of 2008 regarding allocations of the additional tax-exempt bond volume cap for qualified housing issues, military housing allowances and other affected tax-exempt bond provisions.

In addition to the items on this year's plan, an appendix lists the routine guidance that is published regularly each year, such as a revenue procedure providing the amounts of unused housing credit carryover for the calendar year allocated to qualified states under IRC 42(h)(3)(D), and a notice scheduled for March that will provide the 2009 calendar year resident population estimates used in determining the state LIHTC ceiling under IRC 42(h) and the private activity bond volume cap under IRC 146.

RENT & INCOME LIMIT CALCULATOR UPDATED

SAN FRANCISCO, Calif. - September 9, 2008

One of the provisions of the Housing and Economic Recovery Act of 2008 allows low-income housing tax credit (LIHTC) projects located in a rural area—as defined in section 520 of the Housing Act of 1949—to use the greater of area median gross income (AMGI) or national non-metropolitan median income for rent and income determinations. This provision applies to all 9 percent LIHTC properties for rent and income determinations made after July 30, 2008; this change does not apply to bond-financed properties.

To reflect this change, Novogradac & Company has updated the Rent and Income Limit Calculator© to include the rural areas that can use the national non-metro income and rent limit. An intermediary step has been added to the calculator that includes a link to the U.S. Department of Agriculture (USDA) web site that can be helpful in determining if a property is located in a rural area.

Users should note that Novogradac & Company does not certify the accuracy and/or applicability of the USDA web site; USDA may change its determination of which projects qualify as rural during the course of a year. Property owners should periodically check with USDA to determine the continued rural eligibility of an LIHTC project. The Rent and Income Limit Calculator is designed to be a quick reference tool; before using the figures provided by the Rent and Income Limit Calculator, users are urged to read the explanatory and disclaimer language fully and to check with the applicable state housing agency to confirm the information matches the numbers and policies of that state agency. The updated calculator is available online at www.novoco.com/products/rentincome.php.

To learn more about how this and other provisions of the Housing Act will affect LIHTC property compliance, join Novogradac & Company LLP at one of our upcoming LIHTC Property Compliance Workshops.

FHFA PUTS FANNIE, FREDDIE INTO CONSERVATORSHIP

WASHINGTON, D.C. - September 8, 2008

Yesterday, Treasury Secretary Henry Paulson and Jim Lockhart, director of the Federal Housing Finance Agency (FHFA) announced that government sponsored entities (GSEs) Fannie Mae and Freddie Mac would be put into separate conservatorships until they are stabilized. In July, the Housing and Economic Recovery Act of 2008 granted the Treasury, the Federal Reserve and FHFA new authorities with respect to Fannie Mae and Freddie Mac. Paulson said yesterday that based on what they had learned about these institutions and their financial condition over the last four weeks, officials at the FHFA, Treasury Department and Federal Reserve decided that the conservatorship was necessary and appropriate.

Tune in to tomorrow’s Tax Credit Tuesday podcast to hear more about this historic action.

MISSISSIPPI CALLS FOR RETURNED HOUSING TAX CREDITS

JACKSON, Miss.- September 3, 2008

The Mississippi Home Corporation (MHC) last week issued a program bulletin announcing that in response to recent trends in the low-income housing tax credit (LIHTC) market, the agency is offering an opportunity for developers that received an allocation of 2006-2008 annual credit authority and 2008 Gulf Opportunity (GO) Zone LIHTCs and that are experiencing difficulty completing their developments to return those tax credits. All credits that are returned will be re-allocated to developments that are experiencing funding gaps to due a decreased credit purchase price or are experiencing certain cost overruns. Click here for more information.

An update on the LIHTC equity market will be featured in the October 2008 issue of the Journal of Tax Credit Housing, a trade journal covering affordable housing news and trends.

HUD DESIGNATES DDAS FOR 2009

WASHINGTON, D.C.- September 3, 2008

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 as much as 30 percent more LIHTC subsidy than projects not located in DDAs. The designations of qualified census tracts (QCTs) published September 28, 2006, remain in effect.

Join Novogradac & Company LLP to discuss this and other recent developments of interest to affordable housing professionals at the 15th Annual San Francisco Affordable Housing Conference on September 10 and 11.

August

CALIFORNIA ANNOUNCES HOW IT WILL ALLOCATE ADDITIONAL LIHTC CAP

SACRAMENTO, Calif.- August 26, 2008

The California Tax Credit Allocation Committee (TCAC) is making an additional $7.3 million in annual federal low-income housing tax credits (LIHTC) available to pending second round applicants for 9 percent credits by cascading the additional credits through the various set-asides and geographic apportionments, according to a memorandum posted today. The Housing and Economic Recovery Act of 2008 provided an additional 20 cents per capita in 2008 LIHTC to each state. Click here for a copy of the memo and attached allocation process table that TCAC posted to explain how and when it will make its next award allocations.

The additional LIHTC cap will also be discussed at the 15th Annual San Francisco Affordable Housing Conference in San Francisco on September 10-11, where California Treasurer Bill Lockyer, who serves as chair of the California Tax Credit Allocation Committee (TCAC), is slated to deliver the keynote address. In addition, TCAC Executive Director William Pavão is scheduled to attend a California Developers Discussion Forum that will be held in conjunction with the conference. For more information on that forum, please call 415.356.7970.

 

July

CALIFORNIA LIHTC AGENCY & OTHERS RESPOND TO NEW HOUSING LAW

SACRAMENTO, Calif.- July 31, 2008

The California Tax Credit Allocation Committee (TCAC) released a memo today that discusses its plans to address issues of immediate concern and interest to the low-income housing tax credit (LIHTC) community resulting from changes to the law made by H.R. 3221, the Housing and Economic Recovery Act of 2008. Today's memo lists five specific changes that TCAC is considering, as well as the staff's proposed recommendations that will be presented to the committee at its August 20, 2008 meeting.

Several other states' housing finance agencies have announced similar plans. For example, the Colorado Housing Finance Authority announced yesterday that it is reviewing changes to the law and discussing the best way to incorporate them into the state's 2009 qualified allocation plan (QAP). Similarly, the Texas Department of Housing and Community Affairs (TDHCA) announced today that it will host a work group to gather input on the options for implementing the provisions of the new law that relate directly to the LIHTC program. Click here for more information about these announcements, as well as a statement from the National Council of State Housing Agencies (NCSHA) regarding state agencies' eagerness to deploy the resources authorized by H.R. 3221.

To learn about the full range of changes made by the new law to the LIHTC program, register for Novogradac and Company's Affordable Housing Webinar on the 2008 Housing Act to be held on August 12. The impact of the new law will also be discussed in San Francisco on September 10-11 at the 15th Annual San Francisco Affordable Housing Conference, where California Treasurer Bill Lockyer, who serves as chair of the California Tax Credit Allocation Committee (TCAC), is slated to deliver the keynote address.

PRESIDENT BUSH SIGNS HOUSING STIMULUS BILL INTO LAW

WASHINGTON, D.C.- July 30, 2008

President George W. Bush this morning signed into law H.R. 3221, the Housing and Economic Recovery Act of 2008, the Associated Press reports. H.R. 3221 is a package of housing legislation approved by Congress last week that includes modifications to the low-income housing tax credit (LIHTC), rehabilitation tax credit and tax-exempt bond programs, as well as a temporary LIHTC cap increase and numerous other provisions designed to bolster the housing and financial markets.

To learn how this new law will impact both existing and future LIHTC projects, join Novogradac & Company on August 12 for the Affordable Housing Webinar on the 2008 Housing Act. This webinar will summarize the LIHTC provisions contained in the Housing and Economic Recovery Act of 2008 and discuss the many unanswered questions posed by the new law.

These topics will also be discussed at the 15th Annual San Francisco Affordable Housing Conference on September 9-11.

Click here for access to summaries of the new law, as well as analysis from the Journal of Tax Credit Housing and other resources.

IRS PUBLISHES FINAL UTILITY ALLOWANCE RULES

WASHINGTON, D.C.- July 29, 2008

The Internal Revenue Service (IRS) today published final regulations regarding utility allowances for low-income housing tax credit (LIHTC) properties. The final rule made several changes, including amending the regulations to allow owners of LIHTC buildings that are neither Rural Housing Service (RHS)-assisted nor U.S. Department of Housing and Urban Development (HUD)-regulated, and in which no tenant in the building receives RHS tenant assistance, to choose from five options when determining the applicable utility allowance: the public housing authority (PHA) utility allowance; the local utility company estimate; the state agency estimate; HUD's utility schedule model; or an energy consumption model.

Click here for background information and related documents. A complete discussion of the changes made by the final regulations will be available in an upcoming issue of the Property Compliance Report.

 

SENATE PASSES HOUSING STIMULUS BILL

WASHINGTON, D.C.- July 28, 2008

The Senate on Saturday approved H.R. 3221, the Housing and Economic Recovery Act of 2008, by a vote of 72-13. The measure includes modifications to the low-income housing tax credit (LIHTC) and several other provisions of interest to the affordable housing community. President George W. Bush is expected to sign the bill into law this week.  

HOUSE PASSES HOUSING STIMULUS BILL

WASHINGTON, D.C.- July 23, 2008

The House of Representatives today approved H.R. 3221, the American Housing Rescue and Foreclosure Prevention Act, by a vote of 272 to 152. The measure now goes back to the Senate before being sent to the President for his signature. President George W. Bush today indicated he would sign the bill. Click here for a draft of the current version of H.R. 3221 and related documents.

LOUISIANA AGENCY ANNOUNCES LIGHTNING ROUND FOR LIHTCS

BATON ROUGE, La.- July 22, 2008

The board of commissioners of the Louisiana Housing Finance Agency (LHFA) approved the implementation of a "Lightning Round" to allocate returned Gulf Opportunity (GO) Zone and per capita low-income housing tax credits (LIHTC) currently available in calendar year 2008. LHFA says there are approximately $11.1 million in GO Zone credits available for projects located in the GO Zone and $6 million in per capita LIHTCs available that will be awarded only to projects outside of the GO Zone. Any additional credits returned or recaptured before the end of calendar year 2008 will be offered to applicants participating in the Lightning Round. Additionally, the Office of Community Development and the Louisiana Recovery Authority have indicated that as much as $90 million in Community Development Block Grant (CDBG) funds may be available to fund financing gaps for projects located in the GO Zone. Click here for a memo containing detailed information about the tax credit allocation plan for the remaining GO Zone and per capita credits. LHFA has also published a list of frequently asked questions about the Lightning Round.

GAO REPORTS ON GO ZONE TAX INCENTIVES

WASHINGTON, D.C.- July 16, 2008

As of mid-June 2008, eligible states had allocated 87 percent of available Gulf Opportunity (GO) Zone private activity bond authority, and state housing finance authorities had awarded 95 percent of the GO Zone low-income housing tax credits (LIHTCs), according to a report issued today by the Government Accountability Office (GAO). GAO also reports that GO Zone LIHTC-funded units will address about 17 percent and 45 percent of the rental housing units with major or severe damage in the states of Louisiana and Mississippi, respectively. The report identifies tax incentives in the GO Zone Act of 2005 and in subsequent legislation; describes the procedures state governments use in allocating the tax incentives; and describes how tax incentives have been allocated and for what purposes.

SENATE PASSES HOUSING STIMULUS WITH LIHTC PROVISIONS

WASHINGTON, D.C.- July 11, 2008

The Senate, on a vote of 63-5, today passed H.R. 3221, the American Housing Rescue and Foreclosure Prevention Act. The bill is a package of housing stimulus measures that combines a number of bipartisan amendments, including measures that would modernize the low-income housing tax credit (LIHTC) program. Among other things, the bill provides a 20-cent per capita LIHTC cap increase for 2008 and 2009 and increases the small state LIHTC minimum by 10 percent for those years. The housing stimulus bill will now be sent to the House of Representatives where lawmakers are expected to take it up shortly.

The Senate-approved version of H.R. 3221 will be posted online at www.taxcredithousing.com. Additional details about the housing stimulus package will also be discussed in the Novogradac Report on Tax Credits podcast on July 15.

IRS PROVIDES LIHTC RELIEF FOR DISASTER VICTIMS IN WISCONSIN

WASHINGTON, D.C.- July 2, 2008

The Internal Revenue Service today announced in Notice 2008-61 that it will suspend certain requirements under Section 42 of the Internal Revenue Code for certain low-income housing tax credit (LIHTC) properties in the United States as a result of the devastation caused by severe storms, tornadoes and flooding in Wisconsin beginning on June 5, 2008. Click here for more information.

June

IRS TO WAIVE SOME LIHTC RULES FOR VICTIMS OF FLOODING IN INDIANA, IOWA

WASHINGTON, D.C.- June 19, 2008

The Internal Revenue Service (IRS) today announced that it will temporarily suspend certain limitations for qualified low-income housing tax credit (LIHTC) projects located anywhere in the states of Indiana and Iowa in an effort to expand the availability of housing for disaster victims and their families. Owners of LIHTC properties in those states will be allowed to provide housing to victims of recent storms and flooding under guidance that will be set forth in formal notices, which the IRS says will be issued shortly. The IRS says it will continue to monitor closely the housing situation in other states affected by the recent flooding and is prepared to act quickly as circumstances warrant. Click here for more information.

SENATE TO CONSIDER LIHTC PROVISIONS IN HOUSING STIMULUS BILL

WASHINGTON, D.C.- June 19, 2008

Senate Finance Committee Chairman Max Baucus, D-Mont., and Ranking Member Chuck Grassley, R-Iowa, yesterday announced that they would offer tax measures as part of a larger amendment to H.R. 3221 in cooperation with the Senate Banking Committee. The Baucus-Grassley proposal represents an agreement between House and Senate negotiators on the tax provisions that will be included in a final housing stimulus package. Reports indicate that negotiations continue on other, non-tax portions of the bill, which lawmakers are working to pass before July 4. The Baucus-Grassley package includes provisions to temporarily increase the cap for federal low-income housing tax credits (LIHTCs) and simplify the technical rules relating to the LIHTC and tax-exempt housing bonds. Click here for more information about the Baucus-Grassley tax provisions, or visit the Legislation page to review related legislation.

Novogradac & Company LLP will continue to follow the progress of the housing stimulus package and provide updates online at www.taxcredithousing.com and in the weekly Tax Credit Tuesday podcast.

NEW DIRECTOR NAMED FOR SAN FRANCISCO HOUSING AUTHORITY

SAN FRANCISCO, Calif.- June 13, 2008

San Francisco Mayor Gavin Newsom yesterday announced the appointment of Henry A. Alvarez III as the new executive director of the San Francisco Housing Authority (SFHA). Alvarez, who was profiled in the June 2008 issue of the Journal of Tax Credit Housing, is a seasoned housing professional with 20 years of management and leadership experience. For the past four years, Alvarez served as the president and chief executive officer of the San Antonio Housing Authority. Prior to his time in San Antonio, Alvarez served in several roles at housing agencies in Oregon and San Diego. He is scheduled to begin his new post at SFHA on July 14.

HUD PUBLISHES PROPOSED 2009 FAIR MARKET RENTS

WASHINGTON, D.C.- June 12, 2008

The U.S. Department of Housing and Urban Development (HUD) today published proposed fair market rents (FMRs) for fiscal year 2009. 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 1, 2008.

Analysis of the proposed 2009 FMRs will be published in the July issue of Novogradac's Property Compliance Report. To learn more about fair market rents and other compliance topics, join us for the LIHTC Property Compliance Workshop on September 10-11 in San Francisco.

SENATE CONFIRMS PRESTON AS HUD SECRETARY

WASHINGTON, D.C.- June 5, 2008

The Senate yesterday voted unanimously to confirm Steven Preston to serve as the Secretary of the U.S. Department of Housing and Urban Development. Click here to read President George W. Bush's statement about Preston's confirmation.

To learn more about Preston, tune in to the Novogradac Report on Tax Credits podcast. In the June 10 broadcast, Michael J. Novogradac, CPA, will discuss highlights of the Senate Banking Committee hearing about Preston nomination.

May

IRS RULING PROVIDES GUIDANCE FOR USING ENERGY TAX CREDITS IN BOND-FINANCED HOUSING PROJECTS

WASHINGTON, D.C.- May 21, 2008

A recent private letter ruling (PLR) published by the Internal Revenue Service (IRS) provides guidance to affordable housing developers regarding how to structure bond-financed projects to maximize renewable energy investment tax credits available under Section 48 of the Internal Revenue Code. In PLR 200820011, the IRS ruled that no reduction in investment credit basis was required for solar equipment placed in a tax-exempt bond-financed affordable housing project where: bond loan documentation prohibited the use of bond loan proceeds to finance the solar equipment; the bond proceeds were not actually used to finance the solar equipment; and the solar equipment did not serve as collateral for the bond loan.

Learn more about this ruling next week in the Novogradac Report on Tax Credits, a weekly podcast presented on Tax Credit Tuesdays.

HOUSE PASSES HOUSING STIMULUS LEGISLATION

WASHINGTON, D.C.- May 8, 2008

The House today passed H.R. 3221, the American Housing Rescue and Foreclosure Prevention Act. The House bill would create a first-time home buyer tax credit, modernize the Federal Housing Administration, provide comprehensive reform for housing government sponsored enterprises Fannie Mae and Freddie Mac and make significant enhancements to the low-income housing tax credit (LIHTC) and tax-exempt housing bond programs to increase their effectiveness. The Senate approved a different housing stimulus package last month, and the two bills will likely now be reconciled in conference.

Learn what these developments may mean for affordable housing investors, developers and owners at Novogradac & Company LLP's Credit and Bond Financing Conference on May 15-16 in New Orleans, La.

HUD MAKES $1 BILLION IN GRANTS AVAILABLE THROUGH 35 PROGRAMS

WASHINGTON, D.C.- May 8, 2008

The U.S. Department of Housing and Urban Development (HUD) yesterday published its fiscal year 2008 "SuperNOFA," an annual funding notice that makes available more than $1 billion in grants through 35 programs. HUD says it will offer an additional $1.5 billion in homeless grants later in the year through a new electronic application process. To make funding opportunities available to the public as soon as possible, HUD posted its SuperNOFA electronically through www.grants.gov in advance of the Federal Register publication, which is scheduled for May 12, 2008.

CALIFORNIA HOUSING FINANCE AGENCY RELEASES ANNUAL REPORT

SACRAMENTO, Calif.- May 1, 2008

There are more than 232,000 LIHTC units in California, according to the California Tax Credit Allocation Committee's (TCAC's) 2007 Annual Report on the Allocation of Federal and State Low Income Housing Tax Credits in California. In 2007, TCAC awarded nearly $75.9 million in competitive 9 percent federal LIHTCs to 70 proposed housing projects. In addition, $71 million in state tax credits were awarded to 19 competitive 9 percent projects, and $23.4 million state LIHTCs were allocated to nine projects receiving 4 percent LIHTCs with tax-exempt bonds. TCAC expects that 4,424 affordable housing units will be built using 9 percent tax credits awarded in 2007, bringing the total aggregate number of affordable units awarded credit in the competitive, 9 percent program in California to 104,901. Including tax-exempt bond financed projects, TCAC has assisted 232,550 total affordable units with LIHTCs since the program's inception in 1987.

April

HUD ANNOUNCES AVAILABILITY OF RURAL HOUSING AND ECONOMIC DEVELOPMENT PROGRAM FUNDS

WASHINGTON, D.C.- April 28, 2008

The U.S. Department of Housing and Urban Development (HUD) in today's Federal Register published its notice of funding availability (NOFA) for the fiscal year (FY) 2008 Rural Housing and Economic Development Program. Because HUD is required by statute to competitively award RHED assistance by September 1, 2008, HUD decided to publish this NOFA separately and in advance of its FY 2008 Notice of Funding Availability for HUD's Discretionary Programs (SuperNOFA) in an effort to provide potential applicants additional time to prepare and submit their applications. The deadline for applications is May 30, 2008; applications submitted through http://www.grants.gov must be received and validated by Grants.gov no later than 11:59:59 (EDT) on May 30, 2008. HUD warns in today’s NOFA that the validation process may take up to 72 hours. Click here for more information.

BUSH TO NOMINATE SBA CHIEF STEVE PRESTON TO HEAD HUD

WASHINGTON, D.C.- April 18, 2008

President George W. Bush today announced his intention to nominate Steve Preston to serve as the next Secretary of Housing and Urban Development (HUD). Preston is currently head of the Small Business Administration (SBA), a position for which he was unanimously confirmed by the Senate in July 2006. Click here for more information.

IRS INVITES COMMENTS ON LIHTC REGULATIONS

WASHINGTON, D.C.- April 15, 2008

The Internal Revenue Service (IRS) today invited comments concerning an existing final regulation, PS-62-87 (TD 8302), Low-Income Housing Credit for Federally-Assisted Buildings. This regulation provides state and local low-income housing tax credit (LIHTC) agencies and owners of qualified low-income buildings with guidance regarding compliance with the waiver requirement of section 42(d)(6) of the Internal Revenue Code (IRC). The regulation requires documentary evidence of financial distress leading to a potential claim against a federal mortgage insurance fund in order to get a written waiver from the IRS for the acquirer of the qualified low-income building to properly claim the LIHTC. No changes are being made to the regulation at this time and comments will be accepted until June 16.

The LIHTC program will be discussed at the Credit and Bond Financing Conference on May 15-16 in New Orleans, La.

SENATE PASSES HOUSING STIMULUS LEGISLATION

WASHINGTON, D.C.- April 10, 2008

The Senate today passed legislation intended to help reduce foreclosures and support the housing sector through new tax incentives by a vote of 84-12. H.R. 3221, the Foreclosure Prevention Act of 2008, was approved after legislators added an amendment to extend renewable energy tax credits. Unlike a separate package approved yesterday by the House Ways and Means Committee, the Senate’s housing stimulus package does not include any provisions related to the low-income housing tax credit (LIHTC).

To learn more about the different stimulus plans being considered in Congress, download the April 8 Novogradac Report on Tax Credits podcast.

HOUSE COMMITTEE ON WAYS AND MEANS PASSES H.R. 5720

WASHINGTON, D.C.- April 9, 2008

The U.S. House of Representatives Committee on Ways and Means today passed the Housing Assistance Tax Act of 2008. H.R. 5720 was introduced yesterday by House Ways and Means Committee Chairman Charles B. Rangel, D-N.Y., and features several provisions to modify the low-income housing tax credit (LIHTC), including a temporary increase in the LIHTC per capita authority from $2.00 to $2.20. The legislation also confronts the issue of income limits in 2009 by providing LIHTC projects held harmless in 2007 and 2008 with an adjustment equal to the nominal increase in area median income (AMI). The legislation is intended to simplify the housing credit program and provide increased flexibility, efficiency and preservation opportunities. H.R. 5720 includes changes from the version distributed yesterday by Novogradac & Company LLP and the Affordable Housing Tax Credit Coalition. Click here for more information and related documents.

A webcast of today's House Ways and Means Committee meeting is available here. To hear the background on the bill and to follow its progress in Congress, tune in to the Novogradac Report on Tax Credits, a weekly podcast presented each Tuesday.

RANGEL INTRODUCES HOUSING ASSISTANCE TAX ACT

WASHINGTON, D.C.- April 8, 2008

House Committee on Ways and Means Chairman Charles B. Rangel, D-N.Y., today introduced the Housing Assistance Tax Act of 2008, a bill that features several provisions to modify the low-income housing tax credit (LIHTC). Among those provisions is a temporary increase in LIHTC authority from $2 per capita by an additional 20 cents. The legislation would also temporarily increase mortgage revenue bond authority to allow for the issuance of an additional $10 billion of tax-exempt bonds to refinance subprime loans, provide loans to first-time homebuyers and to finance the construction of low-income rental housing. The measure will be considered by the Ways and Means Committee tomorrow and by the full House of Representatives in the coming weeks. Click here for a summary of the bill and the estimated revenue effects.

To hear the background on the bill and to follow its progress in Congress, tune in to the Novogradac Report on Tax Credits, a weekly podcast presented each Tax Credit Tuesday.

Affordable housing legislation will also be discussed by industry experts at the Credit and Bond Financing Conference on May 15-16 in New Orleans, La.

TCAC ADDRESSES LIHTC PRICING UNCERTAINTY

SACRAMENTO, Calif.- April 2, 2008

In a memorandum this week the California Tax Credit Allocation Committee (TCAC) acknowledges pricing uncertainty in the low-income housing tax credit (LIHTC) market and describes how TCAC staff will view syndication letters when underwriting first round applications in light of this uncertainty. The first round of applications for LIHTCs in California is April 9.

To learn how other states' housing finance agencies are responding to current LIHTC market conditions, tune in to the April 1 and March 25 installments of the Novogradac Report on Tax Credits, a weekly podcast presented on Tax Credit Tuesdays.

A detailed examination of state housing agency responses to the LIHTC market will also be published in the May issue of the Journal of Tax Credit Housing.

March

HUD SECRETARY JACKSON RESIGNS

WASHINGTON, D.C.- March 31, 2008

U.S. Department of Housing and Urban Development (HUD) Secretary Alphonso Jackson today announced that he has resigned from his position. Jackson took office in March 2004 and his last day in office will be April 18. In a press conference this morning Jackson said he was resigning to attend to personal and family matters. Deputy HUD Secretary Roy A. Bernardi will step in after April 18 until a successor is confirmed.

Click here to watch a video recording of this morning's press conference. Click here to read a transcript of Secretary Jackson's remarks.

To learn more about this development, tune in to tomorrow's Tax Credit Tuesday podcast. We'll also discuss what this transition in HUD's leadership could mean for the affordable housing community at the Credit and Bond Financing Conference on May 15-16 in New Orleans, La.

REAC GRANTS BLANKET 30-DAY EXTENSION

WASHINGTON, D.C.- March 27, 2008

Because of computer server problems, the Office of Asset Management authorized the U.S. Department of Housing and Urban Development (HUD) Real Estate Assessment Center (REAC) to grant an automatic 30 day extension for all property owners with fiscal years that ended December 31, 2007. The extension is automatic so owners are not required to apply for it. Submissions that were previously due at the end of this month will now be accepted until April 30, 2008.

HUD PUBLISHES GENERAL SECTION OF 2008 SUPERNOFA

WASHINGTON, D.C.- March 19, 2008

The U.S. Department of Housing and Urban Development (HUD) today published a notice that attempts to provide prospective applicants for HUD competitive funding with an opportunity to become familiar with the general section of HUD's fiscal year 2008 Super Notice of Funding Availability (NOFA), in advance of its publication. Today's notice also includes a list of programs that HUD anticipates will be in the FY2008 SuperNOFA, subject to the availability of funds. HUD plans to publish its annual SuperNOFA in the spring. Click here for more information.

February

IRS RELEASES POPULATION FIGURES FOR LIHTC, BOND CALCULATIONS

WASHINGTON, D.C.- February 27, 2008

In Notice 2008-22, the Internal Revenue Service (IRS) this week released new population figures for calculating the 2008 population-based component of states' low-income housing tax credit (LIHTC) ceilings, 2008 volume caps and the 2008 volume limit. Under Revenue Procedure 2007-66, each state's LIHTC ceiling in 2008 is the greater of $2 multiplied by the state population or $2,325,000. Each state's 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.

HOUSING TAX CREDIT MODERNIZATION BILL INTRODUCED IN SENATE

WASHINGTON, D.C.- February 26, 2008

Sen. Maria Cantwell, D-Wash., yesterday introduced S. 2666, a measure to amend the Internal Revenue Code of 1986 to encourage investment in affordable housing that would make several changes to the low-income housing tax credit (LIHTC) including changing its name to the Affordable Housing Tax Credit. Upon introduction, the legislation—commonly referred to as the LIHTC modernization bill—was referred to the Senate Finance Committee.

To learn more, tune in to this week's Tax Credit Tuesday podcast to hear Michael J. Novogradac, CPA, discuss the measure's provisions and its progress in Congress.

NOVOGRADAC'S RENT & INCOME LIMIT CALCULATOR UPDATED FOR 2008

SAN FRANCISCO, Calif.- February 16, 2008

Novogradac & Company LLP's Rent & Income Limit Calculator© has been updated to include the U.S. Department of Housing and Urban Development's (HUD) 2008 rent and income limit data. It is available online at www.novoco.com/products/rentincome.php with the compliments of Novogradac & Company LLP.

The Rent & Income Limit Calculator© will calculate IRS Section 42(i)(3)(A) low-income housing tax credit (LIHTC) rent and income limits for every county and for every metropolitan statistical area (MSA) in the United States. It also provides the HUD sourced 30%, 50%, and 80% income limits for a selected county; automatically calculates the LIHTC rent and income limits for any selected percentage of the area median income (AMGI) for the selected county; and allows users to select parameters to calculate rent and income limits for other affordable housing programs.

The Rent & Income Limit Calculator© has also been updated to allow users to:

  • choose which bedroom sizes are displayed (the default setting displays results for all bedroom sizes).
  • choose which income or rent levels are displayed on the 10 year historical charts.

Novogradac & Company LLP's Rent & Income Limit Calculator© on CD-Rom is also being updated for professionals in the field.

HUD RELEASES INCOME LIMITS FOR 2008

WASHINGTON, D.C.- February 14, 2008

The U.S. Department of Housing and Urban Development (HUD) yesterday released income limits for 2008. Click here for links to median family income, income limits and accompanying information and tables.

HUD again implemented its "hold harmless" policy in areas where income limits decreased; the policy prevents low-income housing tax credit (LIHTC) rents from falling below last year's levels. According to HUD's Income Limits Briefing Materials, income limits were maintained at last year’s level in 637 of 2,043 non-metropolitan areas and 190 out of 532 metropolitan areas. Click here to learn more about the effect of static rent and income levels on LIHTC and tax-exempt bond housing. Additional analysis will also be available in the March issue of the Novogradac Property Compliance Report and the Novogradac Journal of Tax Credit Housing.

Novogradac & Company LLP is currently updating its Rent & Income Limit Calculator© to include 2008 data. Subscribers to the free Industry Alert E-mail service will receive an email announcement when we have completed the update.

To discuss the latest changes to the rent and income limits, join Novogradac & Company LLP at the next LIHTC Property Compliance Workshop, May 15 - 16, 2008 in New Orleans, La.

BUSH SIGNS ECONOMIC STIMULUS MEASURE

WASHINGTON, D.C.- February 13, 2008

President George W. Bush today signed the Economic Stimulus Act of 2008, calling it a "booster shot" for the American economy. The package includes tax rebate checks for individuals, incentives for business investment, and an increase in conforming and Federal Housing Administration (FHA) loan limits.

One of the incentives for business investment would allow businesses to deduct 50 percent of the cost of qualifying property placed in service in 2008. Under this provision, owners of a low-income housing tax credit (LIHTC) property placed in service in 2008 may be able to deduct up to 50 percent of the cost of personal property and land improvements. Click here for Novogradac & Company LLP's analysis of the availability of the bonus depreciation for LIHTC properties.

The economic stimulus package and its provisions, as well as the possibility that additional stimulus legislation could be introduced, will a topic of discussion at Novogradac & Company LLP's upcoming conferences.

OCC REPORT DESCRIBES THE LIHTC FOR BANK INVESTORS

WASHINGTON, D.C.- February 7, 2008

The Office of the Comptroller of the Currency (OCC) today published a Community Developments Insights report that describes how the low-income housing tax credit (LIHTC) program is used to develop affordable rental housing and the major considerations facing bank investors who invest in these credits. The Insights report describes the fundamentals of LIHTCs with a particular focus on topics of interest to community bankers new to the program. The report examines the primary risks and regulatory considerations associated with investments in individual projects receiving LIHTCs as well as investments in funds comprising multiple projects. It also describes how such investments would be considered in a bank’s Community Reinvestment Act (CRA) examination. The OCC says that during the past decade, national banks have invested more than $15 billion in affordable housing projects under the “Part 24” community development investment authority which encourages bank equity investments in activities that primarily promote the public welfare in a safe and sound manner.

January

U.S. HOUSE OF REPRESENTATIVES PASSES ECONOMIC STIMULUS ACT OF 2008

WASHINGTON, D.C.- January 29, 2008

In a move that won praise, the U.S. House of Representatives today passed a more than $150 billion economic-stimulus package that will be considered by the Senate Finance Committee tomorrow. One of the provisions of the Economic Stimulus Act of 2008 would revise subsection (k) of Section 168 of the Internal Revenue Code and create a special allowance for certain property acquired during 2008. In general, the Act would allow for bonus depreciation equal to 50 percent of the adjusted basis of qualified property for property placed-in-service on or after January 1, 2008 and before January 1, 2009, as well as for costs incurred during 2008 for property placed-in-service before January 1, 2010. Qualified property includes personal property and land improvements with a recovery period of at least 10 years, but fewer than 20 years as well as computer software and certain other property. The property must be new property. To qualify for the bonus depreciation, the taxpayer must acquire the property after December 31, 2007 and cannot have entered into a written binding contract to acquire the property prior to January 1, 2008 or after January 1, 2009.  Henry M. Paulson, Jr., secretary of the U.S. Department of the Treasury, today commended House lawmakers for their quick bipartisan action and said he looked forward to similar efforts from Senate lawmakers. Click here for more information about the availability of the bonus depreciation for low-income housing tax credit (LITHC) properties.

HUD ANNOUNCES 2008 ANNUAL ADJUSTMENT FACTORS

WASHINGTON, D.C.- January 22, 2008

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.

IRS TO HEAR COMMENTS ON REPORTABLE TRANSACTIONS RULE

WASHINGTON, D.C.- January 18, 2008

The Internal Revenue Service (IRS) will hold a hearing regarding a proposed rule relating to the disclosure of reportable transactions under sections 6011 and 6111 of the Internal Revenue Code. These regulations propose to add the patented transactions category of reportable transaction to the regulations under Sec.  1.6011-4. The regulations also include conforming changes to the rules relating to the disclosure of reportable transactions by material advisors under section 6111. The public hearing is being held at 10 a.m. on February 21 in the auditorium of the Internal Revenue Building at 1111 Constitution Avenue, NW., Washington, D.C.

TCAC TO CONSIDER PROPOSED 2008 REGULATIONS NEXT WEEK

SACRAMENTO, Calif.- January 15, 2008

The California Tax Credit Allocation Committee (TCAC) yesterday released an update on the proposed regulations for its 2008 low-income housing tax credit (LIHTC) program. On November 21, TCAC released proposed regulation changes for program year 2008 and TCAC staff subsequently held four public hearings and accepted written public comments. Fifty-three individuals and organizations formally commented on the initial proposed changes and TCAC staff yesterday released a summary of those comments and the final recommendations it will submit for committee consideration and adoption on January 23, 2008.