News Archive

2010

February

SENATE JOBS BILL COULD INCLUDE TAX CREDIT EXTENSIONS

WASHINGTON, D.C. - February 9, 2010

Despite inclement weather that could delay a vote, Senate Majority Leader Harry Reid, D-Nev., is reported to be working to get a bill designed to spur job growth to the Senate floor by the end of this week. A draft of the bill circulated today features several tax extensions, including an extension of the Section 1602 low-income housing tax credit (LIHTC) cash grant exchange program that was created by the American Recovery and Reinvestment Act (Recovery Act); an extension for one year of the new markets tax credit (NMTC); and a retroactive extension of deadlines for Gulf Opportunity (GO) Zone provisions that expired in 2009. The draft bill also includes the codification of the economic substance doctrine, but reports indicate that the issue is still under discussion.

FHFA RELEASES FANNIE, FREDDIE CONSERVATORSHIP LETTER

WASHINGTON, D.C. - February 2, 2010

Federal Housing Finance Agency (FHFA) Acting Director Edward J. DeMarco today sent a letter about Fannie Mae’s and Freddie Mac’s (GSEs’) conservatorship to Reps. Barney Frank, D-Mass., and Spencer Bachus, R-Ala., of the House Financial Services Committee, and Sens. Christopher Dodd, D-Conn., and Richard Shelby, R-Ala., of the Senate Banking, Housing and Urban Affairs Committee. The letter addressed FHFA’s plans for the GSEs business activities while they are in conservatorship. The eight-page letter reviews the establishment and purposes of the conservatorship; operation of the conservatorships; and FHFA’s views on the GSEs’ future business activities, including loan modifications and mitigating credit losses, retained portfolio, new products and affordable housing mission. In the letter, DeMarco concludes that the conservatorship cannot be a long term solution, but that, while there are many ways of reorganizing the GSEs, the only option available under the existing law is to reconstitute the GSEs under their current charters.

Additional information about Fannie Mae and Freddie Mac and the FHFA’s conservatorship of the GSEs can be found here.

FEDERAL BUDGET PROPOSAL EXTENDS LIHTC EXCHANGE PROGRAM

WASHINGTON, D.C. - February 1, 2010

Today President Barack Obama transmitted the fiscal year (FY) 2011 proposed budget to the Congress, which includes an extension of the Section 1602 low-income housing tax credit (LIHTC) cash grant exchange program that was created by the American Recovery and Reinvestment Act (Recovery Act). Under the proposal, states would be able to exchange 100 percent of unused housing credit ceiling for 2009, 40 percent of the state’s 2010 per capita authority, and 40 percent of the state’s share of the 2010 national pool allocation, if any. States would have until December 31, 2012 to utilize the cash assistance. Click here for more information about the exchange program.

Tune in to the February 9 Tax Credit Tuesday podcast to hear more about this proposal and the next steps in the federal budget process.

January

HISTORIC SCHOOLS REHABILITATION ACT INTRODUCED IN THE SENATE

WASHINGTON, D.C. - January 29, 2010

Senators Jim Webb, D-Va., and Mark Warner, D-Va., today introduced The Rehabilitation of Historic Schools Act of 2010. The bill, which provides a tax credit for communities to partner with private sector developers to rehabilitate the nation’s older school buildings, is a the companion bill to H.R. 4133, introduced in the House by Virginia Rep. Eric Cantor on November 19, 2009. The measure would change a provision in the federal rehabilitation tax credit that restricts renovation of older public school buildings, limiting the ability of local governments to partner with private developers to rehabilitate schools. A copy of the bill and a fact sheet about the legislation can be found here.

Novogradac & Company will follow the progress of the Rehabilitation of Historic Schools Act and provide updates during the Tax Credit Tuesday podcasts and in the newly expanded Novogradac Journal of Tax Credits.

DOE ISSUES RULE REGARDING LIHTC, HUD PROPERTIES' ELIGIBILITY FOR WAP

WASHINGTON, D.C. - January 25, 2010

The U.S. Department of Energy (DOE) today released a final rule amending the eligibility provisions applicable to multi-unit buildings under the Weatherization Assistance Program (WAP). Under the final rule, if a multi-unit building is under an assisted or public housing program and is identified by the U.S. Department of Housing and Urban Development (HUD), participates in the low-income housing tax credit (LIHTC) program, or includes units that participate in the U.S. Department of Agriculture (USDA) Rural Housing Service's Multifamily Housing Programs, and is included on a list published by DOE, that building will meet certain WAP eligibility requirements without the need for further evaluation or verification. DOE says this rule, which is effective February 24, 2010, will reduce the procedural burdens on evaluating applications from buildings that are part of these programs.

HUD ISSUES FHA MULTIFAMILY RENTAL CLOSING DOCUMENTS FOR COMMENT

WASHINGTON, D.C. - January 21, 2010

In today’s Federal Register, the U.S. Department of Housing and Urban Development (HUD) announced that it was issuing for public comment a comprehensive set of revised closing documents for use in Federal Housing Administration (FHA) multifamily rental projects. Today’s notice starts anew the process for updating the multifamily rental project closing documents that originally began in 2004. In revising these forms, HUD says it identified language and policies that were outdated and needed to be changed to be consistent with modern real estate and mortgage lending laws and practices. By reflecting current terminology and current lending laws and practices, HUD says the updated multifamily rental project closing documents will better protect and benefit all parties involved in these transactions. The multifamily closing documents are posted on HUD’s web site here.

HUD AWARDS $2 BILLION THROUGH NEIGHBORHOOD STABILIZATION PROGRAM

WASHINGTON, D.C. - January 15, 2010

U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan announced yesterday the award of $2 billion in American Recovery and Reinvestment Act funding to states, local governments and non-profit housing developers, under HUD’s Neighborhood Stabilization Program (NSP). Nearly 80 grantees are receiving awards. A full list of grants awarded can be found here. The $2 billion in NSP grants will help state and local governments and non-profit developers collaborate to acquire land and property; to demolish or rehabilitate abandoned properties; offer down-payment and closing cost assistance to low- to middle-income homebuyers; and create “land banks” to assemble, temporarily manage and dispose of foreclosed homes.

ADMINISTRATION COMPLETES TRANSACTIONS UNDER HFA INITIATIVE

WASHINGTON, D.C. - January 13, 2010

The U.S. Department of the Treasury, together with the Department of Housing and Urban Development (HUD) and the Federal Housing Finance Agency (FHFA) today announced the completion of all transactions under the recently-introduced state and local Housing Finance Agency (HFA) Initiative, a key element of the Obama Administration's Homeowner Affordability and Stability Plan. As part of the initiative, the New Issue Bond Program (NIBP) provided temporary financing for HFAs to issue new housing bonds. Treasury reports that more than 90 state and local HFAs representing 49 states participated in the NIBP for an aggregate total new issuance of $15.3 billion. Participating HFAs are expected to provide affordable multifamily loans that will help keep rents affordable for tens of thousands of renters. The Treasury Department says that government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac played a central role in both the program’s design and transaction execution.

JOINT CENTER REPORT EXAMINES DISRUPTION OF LIHTC PROGRAM

CAMBRIDGE, Mass. - January 6, 2010

There is cautious optimism that much delayed affordable rental housing production will occur in 2010, although more should be done to mitigate vulnerabilities in the low-income housing tax credit (LIHTC) program and address issues surrounding investor demand, according to a new report from Harvard University’s Joint Center for Housing Studies. A paper released this week, “The Disruption of the Low-Income Housing Tax Credit Program: Causes, Consequences, Responses, and Proposed Correctives,” examines the experience to date with two programs created by the Recovery Act — the Tax Credit Assistance Program (TCAP) and the Section 1602 program, which provides cash grants in lieu of LIHTCs. The report discusses the current situation and assesses several proposals for reform. Click here to download the paper from the Joint Center for Housing Studies.

The findings of this report will be one of the many topics discussed at Novogradac & Company LLP’s 16th Annual Tax Credit Developers Conference in Miami, Fla. on January 14 and 15.