Low-Income Housing Tax Credits:
News Archive
2010
June
SENS. BAUCUS AND LANDRIEU UNVEIL SMALL BUSINESS JOBS ACT
WASHINGTON, D.C. - June 30, 2010
An amended version of H.R. 5297, the Small Business Jobs Act, was released yesterday by Senate Finance Committee Chairman Max Baucus, D-Mont., and Senate Committee on Small Business and Entrepreneurship Chair Mary Landrieu, D-La. The bill’s provisions are meant to help small businesses access capital, stimulate investment in small businesses and promote entrepreneurship. Among other things, H.R. 5297 would extend the carryback for general business credits to five years for certain small businesses. Click here for a summary of H.R. 5297 or for more information about the Small Business Jobs Act.
To learn what the Small Business Jobs Act could mean for the low-income housing tax credit community, join Novogradac & Company for the 17th Annual Affordable Housing Tax Credit Conference, Sep. 30-Oct. 1, in San Francisco, Calif.
To stay updated on the bill’s progress in Congress, follow Michael J. Novogradac, CPA, on Twitter. You can also tune in to the Tuesday Credit Tuesday podcast for weekly updates.
TAX EXTENDERS BILL DEFEATED IN SENATE
WASHINGTON, D.C. - June 25, 2010
The Senate yesterday failed to pass H.R. 4213, the American Jobs and Closing Tax Loopholes Act of 2010, also known as the tax extenders bill. The bill was defeated 57 to 41, three votes short of the majority it needed to pass. The bill would have extended the New Markets Tax Credit (NMTC) program for one year and allow the NMTC to offset the alternative minimum tax with respect to qualified investments made between March 15, 2010 and January 1, 2012. It would also have extended the Section 1602 low-income housing tax credit (LIHTC) cash grant exchange program and made Gulf Opportunity (GO) Zone LIHTCs and Disaster LIHTCs eligible for the program. Reports indicate that Sen. Harry Reid will set aside the tax extender bill for now and instead concentrate on the small business tax bill.
Tune in to the Tax Credit Tuesday podcast on June 29 to hear what the next steps may be for the extenders package.
SENATOR BAUCUS DRAFTS REVISED EXTENDERS BILL
WASHINGTON, D.C. - June 22, 2010
Senate Finance Chairman Max Baucus has released a new Senate amendment substitute for H.R. 4213, the American Jobs and Closing Tax Loopholes Act of 2010, also known as the tax extenders bill. The latest version includes provisions to extend for one year the Section 1602 low-income housing tax credit (LIHTC) cash grant exchange program, expand the Section 1602 program to make Gulf Opportunity (GO) Zone LIHTCs and Disaster LIHTCs eligible for the program, extend for one year the New Markets Tax Credit (NMTC) program, and allow the NMTC to offset the alternative minimum tax with respect to qualified investments made between March 15, 2010 and January 1, 2012. The bill would also fund the National Housing Trust Fund (NHTF) and extend by two years the placed-in-service date for GO Zone LIHTCs. The Senate could vote on the revised extenders package this week. Follow Michael J. Novogradac, CPA, on Twitter for updates as they develop.
PUBLIC HEARINGS ON COMMUNITY REINVESTMENT ACT REGULATIONS ANNOUNCED
WASHINGTON, D.C. - June 17, 2010
The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency and the Office of Thrift Supervision announced today that the agencies will hold four public hearings on modernizing the regulations that implement the Community Reinvestment Act (CRA). The hearings will focus on regulatory, rather than statutory, changes and address the following topics: geographic coverage; performance tests, asset thresholds and designations; affiliate activities; community development; ratings and incentives; and disclosures and performance evaluations. Interested parties must register for the hearings and are encouraged to provide written copies of their testimony in advance. People may also submit written comments through August 31, 2010. Dates and locations of the hearings are available here. A formal notice about the hearings will also be published in the Federal Register.
SUMMARY, COST ESTIMATES POSTED FOR SENATE EXTENDER AMENDMENT
WASHINGTON, D.C. - June 9, 2010
The Senate Finance Committee has released additional documents related to Senate Amendment 4301, a substitute for H.R. 4213, the American Jobs and Closing Tax Loopholes Act of 2010. Provisions included in H.R. 4213, also known as the tax extenders bill, would extend for one year the Section 1602 low-income housing tax credit (LIHTC) cash grant exchange program, extend for one year the New Markets Tax Credit (NMTC) program, and allow the NMTC to offset the alternative minimum tax with respect to qualified investments made between March 15, 2010 and January 1, 2012. The bill would also fund the National Housing Trust Fund (NHTF) and extend by two years the placed-in-service date for Gulf Opportunity (GO) Zone LIHTCs.
The documents released yesterday include a summary of the amendment, a summary of changes made by the amendment, and estimates from the Congressional Budget Office (CBO) budget and Joint Committee on Taxation (JCT) of the budget effects of the amendment. The Senate resumed consideration of the bill today.
To hear more about the status of H.R. 4213, the American Jobs and Closing Tax Loopholes Act of 2010, download this week’s Tax Credit Tuesday podcast.
NOVOGRADAC'S RENT & INCOME CALCULATOR UPDATED FOR 2010
WASHINGTON, D.C. - June 1, 2010
Novogradac & Company LLP's Rent & Income Limit Calculator© has been updated to include the U.S. Department of Housing and Urban Development's (HUD) 2010 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 IRC 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.
To learn what the 2010 rent and income limits mean for your property, download a recording of Novogradac & Company's webinar: Income Limits and Your Project.
If you would like to engage Novogradac & Company LLP to calculate the rent and income limits for your property, please contact Jim Kroger at jim.kroger@novoco.com.
May
REVISED REVENUE ESTIMATES AVAILABLE FOR EXTENDERS BILL
WASHINGTON, D.C. - May 27, 2010
The House Ways and Means Committee released additional documents related to H.R. 4213, the American Jobs and Closing Tax Loopholes Act, also known as the tax extenders bill. Provisions included in the legislation would extend for one year the Section 1602 low-income housing tax credit (LIHTC) cash grant exchange program, extend for one year the New Markets Tax Credit (NMTC) program, and allow the NMTC to offset the alternative minimum tax with respect to qualified investments made between March 15, 2010 and January 1, 2012. The bill would also fund the National Housing Trust Fund (NHTF) and extend by two years the placed-in-service date for Gulf Opportunity (GO) Zone LIHTCs.
The documents released today include a manager's amendment by Ways and Means Committee Chairman Rep. Sander Levin, D-Mich., updated revenue estimates and a description of changes made since May 20. The House is expected to vote today on H.R. 4213; the bill could be sent to the Senate tomorrow.
The NMTC program extension will be one of the many hot topics discussed at the 9th Annual New Markets Tax Credit Spring Conference on June 10-11 in Washington, D.C.TEXT OF REVISED TAX EXTENDERS LEGISLATION RELEASED
WASHINGTON, D.C. - May 21, 2010
The legislative text of H.R. 4213, the American Jobs and Closing Tax Loopholes Act, a package of tax extender legislation, has been released. The bill was released yesterday as a House Amendment to the Senate Amendment to H.R. 4213. The House vote on the extenders has been delayed until May 25 because of House concerns, including carried interest taxation and total cost.
Provisions included in the legislation would extend for one year the Section 1602 low-income housing tax credit (LIHTC) cash grant exchange program, extend for one year the New Markets Tax Credit (NMTC) program, and allow the NMTC to offset the alternative minimum tax with respect to qualified investments made between March 15, 2010 and January 1, 2012. The bill would also fund the National Housing Trust Fund (NHTF) and extend by two years the placed-in-service date for Gulf Opportunity (GO) Zone LIHTCs.
The Tax Extenders Act of 2009 passed the House of Representatives on December 9, 2009 and the Senate on March 10 passed a similar package, the American Workers, State and Business Relief Act, as an amendment to the House bill. Ways and Means Committee Chairman Sander Levin, D-Mich., and Senate Finance Committee Chairman Max Baucus, D-Mont., worked with House and Senate leadership and their colleagues to merge these two packages into the American Jobs and Closing Tax Loopholes Act.
The NMTC program extension will be one of the many hot topics discussed at the 9th Annual New Markets Tax Credit Spring Conference on June 10-11 in Washington, D.C.
REVISED TAX EXTENDERS LEGISLATION TO BE INTRODUCED
WASHINGTON, D.C. – May 20, 2010
Ways and Means Committee Chairman Sander Levin, D-Mich., and Senate Finance Committee Chairman Max Baucus, D-Mont., will release today the legislative text of the American Jobs and Closing Tax Loopholes Act, a package of tax extender legislation. Provisions included in the legislation would extend for one year the Section 1602 low-income housing tax credit (LIHTC) cash grant exchange program, extend for one year the New Markets Tax Credit (NMTC) program, and allow the NMTC to offset the alternative minimum tax with respect to qualified investments made between March 15, 2010 and January 1, 2012. The bill would also fund the National Housing Trust Fund (NHTF) and extend by two years the placed-in-service date for Gulf Opportunity (GO) Zone LIHTCs.
The Tax Extenders Act of 2009 passed the House of Representatives on December 9, 2009 and the Senate on March 10 passed a similar package, the American Workers, State and Business Relief Act, as an amendment to the House bill. Sen. Baucus and Rep. Levin worked with House and Senate leadership and their colleagues to merge these two packages into the American Jobs and Closing Tax Loopholes Act, which they will introduce today as a House Amendment to the Senate Amendment to H.R. 4213. The House is expected to take up the bill tomorrow, May 21.
The NMTC program extension will be one of the many hot topics discussed at the 9th Annual New Markets Tax Credit Spring Conference on June 10-11 in Washington, D.C.HUD RELEASES INCOME LIMITS FOR 2010
WASHINGTON, D.C. – May 14, 2010
The U.S. Department of Housing and Urban Development (HUD) today released income limits for 2010. Click here for links to the 2010 income limits and accompanying information and tables. Under the Housing and Economic Recovery Act of 2008 (Public Law 110-289), income limits used to determine qualification levels as well as set maximum rental rates for projects funded with low-income housing tax credits (LIHTC) and projects financed with tax-exempt housing bonds - referred to by HUD as Multifamily Tax Subsidy Projects (MTSPs) - are now calculated and presented separately from the Section 8 income limits.
Novogradac & Company LLP is currently updating its Rent & Income Limit Calculator© to include 2010 data. Subscribers to the free Industry Alert E-mail service will receive an e-mail announcement when the update has been completed.
In the meantime, for questions about using the new 2010 income limits please call Jim Kroger, CPA, at (415) 356-8000 or click here to learn more about Novogradac & Company’s property compliance services.
To hear this news discussed in detail, tune in to the Tax Credit Tuesday podcast on May 18.
To learn what the 2010 rent and income limits mean for your property, tune in to Novogradac & Company's webinar: Income Limits and Your Project. Stay tuned to www.novoco.com/events for details about this webinar.HUD TO END HOLD-HARMLESS POLICY FOR SECTION 8 INCOME LIMITS
WASHINGTON, D.C. – May 12, 2010
The U.S. Department of Housing and Urban Development (HUD) will eliminate the hold-harmless policy in estimating Section 8 income limits, according to a pre-publication copy of a notice posted online today. The notice says this change will allow Section 8 income limits to decrease beginning with the fiscal year (FY) 2010 income limits, but HUD will limit all annual decreases to no more than 5 percent and limit all annual increases to 5 percent or twice the change in national median family income, whichever is greater. The notice, which still must be published officially in the Federal Register, follows notices of September 14, 2009, and October 7, 2009, that solicited public comment on HUD’s proposal to discontinue its hold-harmless policy. In the new notice, HUD discusses the comments received about the proposed policy change, including questions regarding how this policy change will impact multifamily tax subsidy projects (MTSPs) financed with low-income housing tax credits (LIHTCs). HUD also announced that rents used in its HOME Investment Partnerships program (HOME) will continue to be held harmless and that income limits for rural housing programs will continue their current hold-harmless policy, based on different area definitions.
HUD TO SURVEY LOW-INCOME HOUSING TAX CREDIT PROPERTY OWNERS
WASHINGTON, D.C. – May 11, 2010
The U.S. Department of Housing and Urban Development (HUD) today invited public comments on a proposed “Study of the Low-Income Housing Tax Credit (LIHTC) Program After 15 Years.” HUD’s Office of Policy Development and Research (PD&R) has commissioned this study to learn what happened to LIHTC properties after the first 15 years, when the original use restrictions for properties that received tax credit allocations before 1990 expired, and when some tax credit properties funded after that date also were able to leave the program. In a notice published in today’s Federal Register, HUD says a survey of LIHTC property owners is planned for the fall 2010. That survey will collect data on LIHTC property owners' experience with the program and gather information that factored into property disposition decisions. Data will also be collected on whether projects were sold and whether projects continued as affordable rental housing. Comments on the proposed survey will be accepted through July 12, 2010.
CANTWELL INTRODUCES 5-YEAR LIHTC CARRYBACK BILL
WASHINGTON, D.C. – May 7, 2010
Senator Maria Cantwell, D-Wash., yesterday introduced S. 3326, the Job Creation and Affordable Housing Act. The bill would extend for one-year the Section 1602 low-income housing tax credit (LIHTC) cash grant exchange program and expand the program to include 4 percent LITHCs. S. 3226 would also allow a 5-year carryback of the LIHTC. The measure is co-sponsored by Sens. John Kerry, D-Mass., and Barbara Boxer, D-Calif. Upon introduction, S. 3326 was referred to the Senate Finance Committee.
Tune in to the Tax Credit Tuesday podcast on May 11 to hear more about the proposals and other tax credit legislation.
To learn the latest about working with the Section 1602 LIHTC cash grant program, it’s not too late to register for Novogradac & Company’s affordable housing conference, “Working with LIHTCs in an ARRA World” next week in New Orleans, La.
KENTUCKY PROVIDES INFORMATION FOR LIHTC PROPERTIES AFFECTED BY FLOODS
Frankfort, Ky. – May 5, 2010
In response to recent flooding in the state, the Kentucky Housing Corporation (KHC) yesterday released encouraged multifamily housing property owners to contact them with questions related to or reports of flood damage to affordable multifamily housing developments. KHC also announced that it is currently updating its online database with information about flood damages to multifamily developments. While funding availability is limited, KHC can provide temporary rental assistance to income-eligible households through partnerships with local housing agencies throughout the state. Contact KHC at (800) 633-8896 for information or to report flood damage to projects participating in the project-based rental assistance program or projects financed with KHC funding sources, including low-income housing credits.
April
CALIFORNIA STATE BOND FREEZE LIFTED
WASHINGTON, D.C. - April 29, 2010
The California Department of Housing and Community Development (HCD) on April 27 released a memorandum regarding Department of Finance Budget Letter (BL) 10-09, which was released the same day and lifted the state's bond freeze that had been in place since December 2008. HCD explains in the memo that BL 10-09 supersedes BL 08-33, which directed state departments and agencies that had expenditure authority over bond funds to cease making new contracts or obligations for programs or projects that were funded from general obligation (GO) bond and lease revenue bonds. This restriction included funds under Proposition 46 and 1C, which were widely used to develop affordable housing. HCD says the release of BL 10-09 will allow HCD, grant applicants and the contracting community to begin to plan for the future; HCD plans to provide information to project developers as soon as possible regarding the removal of the restrictions that had been placed on previously announced awards.
HUD INVITES PUBLIC INPUT ON HOUSING FINANCE SYSTEM REFORM
WASHINGTON, D.C. - April 22, 2010
The Department of Housing and Urban Development (HUD) today published a notice seeking public input on establishing a more stable and sound housing finance system. As described in an announcement last week, HUD is inviting public comment on the future of the housing finance system, including Fannie Mae and Freddie Mac, and the overall role of the federal government in housing policy. Today’s notice lists seven questions on which HUD and the Treasury Department would like public input, and describes the process for submitting comments, which are due by July 21.
SEN. LINCOLN URGES END TO NEGOTIATIONS OF H.R. 4213
WASHINGTON, D.C. - April 2, 2010
Sen. Blanche Lincoln, D-Ark., yesterday released the text of a letter she sent to Senate Majority Leader Harry Reid and Speaker of the House Nancy Pelosi urging the lawmakers to complete Senate-House negotiations of H.R. 4213, the American Workers, State, and Business Relief Act of 2010, also referred to as the tax credit extenders package. The Senate-passed version of the bill includes an extension of the New Markets Tax Credit program and makes Gulf Opportunity Zone and Midwestern Disaster Credits eligible for the low-income housing tax credit exchange program. Lincoln's letter urged Reid and Pelosi to prioritize the legislation when Congress reconvenes April 10. The text of Lincoln's letter can be found here. The version of H.R. 4213 that was passed by the Senate on March 10, 2010 can be found here.
The NMTC program extension will be one of the hot topics discussed at the 9th Annual New Markets Tax Credit Spring Conference June 10-11 in Washington, D.C.
March
HUD REQUESTS COMMENT ON RECOVERY ACT REPORTING
WASHINGTON, D.C. - March 26, 2010
The U.S. Department of Housing and Urban Development (HUD) in today’s Federal Register issued an emergency request for comment related to its American Recovery and Reinvestment Act Section 1512 reporting. HUD is requesting comment on the revised information collection requirement that it submitted to the Office of Management and Budget for emergency review. The comments are being solicited to evaluate if the proposed information collection is necessary for the proper performance of the agency’s functions; evaluate the accuracy of the agency’s estimate of the burden of the proposed information collection; enhance the quality, utility and clarity of the collected information; and minimize the burden of information collection on those who are to respond. Affected programs include the Tax Credit Assistance and Community Development Block Grant programs. Interested parties should submit comments by April 2. Click here to view the notice.
The Recovery Act will be the focus of Novogradac & Company’s conference Working with LIHTCs in an ARRA World, May 13-14, 2010 in New Orleans, La.
HOUSE APPROVES JOB BILL WITH 4 PERCENT EXCHANGE PROVISION
WASHINGTON, D.C. - March 24, 2010
The House of Representatives today approved H.R. 4849, the Small Business and Infrastructure Jobs Tax Act, by a vote of 246-178. The bill includes tax relief for small businesses and financing measures to create jobs. Among other things, the bill would make tax-exempt bond-financed properties eligible for the Section 1602 low-income housing tax credit (LIHTC) cash grant exchange program.
HUD UPDATES LIHTC DATABASE WITH DATA THROUGH 2007
WASHINGTON, D.C. - March 23, 2010
The U.S. Department of Housing and Urban Development (HUD) last month updated its Low-Income Housing Tax Credit (LIHTC) Database. The update includes data for projects placed in service through 2007. This included 618 projects and 58,650 units placed in service between 1995 and 2006 that were not included in the previous updates. The database, available to the public since 1997, now includes information on more than 1.8 million housing units placed in service between 1987 and 2007. The database details the size, unit mix, construction type, financing sources and location of individual projects. A set of 36 tables released with last month’s update report national and regional trends.
BINGAMAN BILL WOULD PROVIDE FIVE-YEAR LIHTC CARRYBACK
WASHINGTON, D.C. - March 19, 2010
Sen. Jeff Bingaman yesterday introduced legislation aimed at stimulating new affordable housing development by adding incentives to the Low-Income Housing Tax Credit (LIHTC) program. S. 3141, the Low Income Housing Tax Credit Recovery Act of 2010, allows LIHTCs for existing and future investments to be carried back up to five years. Click here for more information about S. 3141.
To learn more about the carryback proposal, tune in to the Tax Credit Tuesday podcast on March 23.
IRS PROVIDES GUIDANCE ON TAX TREATMENT OF SECTION 1602 FUNDS
WASHINGTON, D.C. - March 17, 2010
In Notice 2010-18 the Internal Revenue Service provides guidance to low-income housing tax credit allocation agencies in determining how to reduce the LIHTC ceiling under Internal Revenue Code Section 42(h)(3) when tax credits are exchanged for funds under Section 1602 of the American Recovery and Reinvestment Tax Act of 2009. The notice also provides guidance regarding the effect of Section 1602 funds on building basis and taxpayer income.
To hear a detailed discussion of what the notice means for the LIHTC community, tune in to the Tax Credit Tuesday podcast on March 23.WAYS AND MEANS TO CONSIDER SMALL BUSINESS, INFRASTRUCTURE JOB CREATION BILL
WASHINGTON, D.C. - March 15, 2010
U.S. House Committee on Ways and Means Chairman Sander M. Levin, D-Mich., today unveiled a discussion draft of the Small Business and Infrastructure Jobs Tax Act, legislation that would provide tax relief to small businesses and extend financing measures to create jobs. Among other things, the bill would make tax-exempt bond-financed properties eligible for the Section 1602 low-income housing tax credit (LIHTC) cash grant exchange program and allow the new markets tax credit (NMTC) to be used to offset the alternative minimum tax (AMT). The Committee on Ways and Means is expected to consider the legislation on Wednesday.
AGENCIES ADOPT FINAL INTERAGENCY CRA QUESTIONS AND ANSWERS
WASHINGTON, D.C. - March 11, 2010
The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision today adopted as final a revised set of “Interagency Questions and Answers Regarding Community Reinvestment.” The Questions and Answers provide guidance for use by agency personnel, financial institutions and the public regarding implementation of the Community Reinvestment Act (CRA). The Questions and Answers were last revised on January 6, 2009; in response to comments received on the last revisions, the agencies made minor clarifications to the CRA guidance. Those revisions are included in the final Questions and Answers that are effective today.
IRS ACCEPTS COMMENTS ON FORM 8610
WASHINGTON, D.C. - March 4, 2010
The Internal Revenue Service (IRS) today invited public comments on Form 8610, Annual Low-Income Housing Credit Agencies Report, and Schedule A (Form 8610), Carryover Allocation of Low-Income Housing Credit. No changes are being proposed at this time; the comment invitation was made as part of the effort to reduce paperwork and respondent burden under the Paperwork Reduction Act of 1995. Written comments should be submitted on or before May 3, 2010 to be assured of consideration.
REPORT DESCRIBES IMPACT OF FEDERAL HISTORIC TAX CREDIT
WASHINGTON, D.C. - March 3, 2010
The federal historic tax credit is a highly efficient job creator-accounting for the creation of 1.8 million new jobs over the life of the program, according to the "First Annual Report on the Economic Impact of the Federal Historic Tax Credit," which was released today. The report found that historic tax credits generated jobs more efficiently than other stimulus options and the study concludes that the economic activity leveraged by the historic tax credit returns more tax revenue to the U.S. Treasury than the cost of implementing the program. The report, the first to ever to comprehensively examine the economic impact of the federal historic tax credit, also underscores the need for additional legislation to strengthen the federal credits, making them more widely available for smaller, rural projects and also encouraging their use for green and sustainable rehab projects.
Tune in to next week's Tax Credit Tuesday podcast to hear Michael J. Novogradac, CPA, discuss the report's findings and their significance.
HUD RELEASES DETAILS ABOUT LIHTC TENANT DATA COLLECTION
WASHINGTON, D.C. - March 3, 2010
The U.S. Department of Housing and Urban Development (HUD) will use a system similar to, and based on, the current Tenant Rental Assistance Certification System (TRACS) system to collect data about tenants of low-income housing tax credit (LIHTC) properties, according to a notice published in today’s Federal Register. The Housing and Economic Reform Act of 2008 requires each state agency to furnish HUD, not less than annually, information concerning the race, ethnicity, family composition, age, income, use of rental assistance under Section 8 or other similar assistance, disability status, and monthly rental payments of households residing in each property receiving LIHTCs through the agency. On March 30, 2009, HUD published a notice seeking early input on a methodology or approach for the data collection. HUD says it received approximately 25 comments from state housing finance and tax credit agencies; tax credit property managers; housing trade associations; research institutes; and not-for-profit organizations. In today’s notice, HUD summarizes those public comments, addresses the significant issues raised and issues specific information collection requirements.
SENATE CONSIDERS TAX EXTENDERS LEGISLATION THIS WEEK
WASHINGTON, D.C. - March 2, 2010
The Senate yesterday began consideration of the American Workers, State, and Business Relief Act of 2010, which would extend tax provisions that expired on December 31, 2009, as well as address several provisions that expired on February 28, 2010. Senate Finance Committee Chairman Max Baucus, D-Mont., and Senate Majority Leader Harry Reid, D-Nev., introduced the amendment that would, among other things, extend 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); extend for one year the new markets tax credit (NMTC); and extend Gulf Opportunity (GO) Zone provisions.
February
REID INTRODUCES TAX EXTENDERS PACKAGE
WASHINGTON, D.C. - February 25, 2010
Sen. Harry Reid yesterday introduced legislation to extend several tax provisions that expired on December 31, 2009. The American Workers, State, and Business Relief Act of 2010 would extend 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); extend for one year the new markets tax credit (NMTC); and extend Gulf Opportunity (GO) Zone provisions. The package of tax extenders is estimated to cost about $31 billion over 10 years. One of the cost offsets included in the bill is codification of the economic substance doctrine. Reports indicate the bill could be considered as early as next week.
HUD INVITES COMMENTS ON LIHTC DATABASE
WASHINGTON, D.C. - February 24, 2010
The U.S. Department of Housing and Urban Development (HUD) today invited comments on a requirement of the Housing and Economic Recovery Act (HERA) of 2008. HERA requires each state agency administering low-income housing tax credits (LIHTCs) to furnish HUD information concerning the race, ethnicity, family composition, age, income, use of rental assistance under Section 8 or other similar assistance, disability status, and monthly rental payments of households residing in each property receiving such credits. Comments will be accepted through March 26, 2010.
SUMMARY POSTED: UNITS FUNDED, JOBS CREATED BY SECTION 1602
WASHINGTON, D.C. - February 23, 2010
Nearly 28,000 jobs have been created or retained by 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), according to figures released today by the Treasury Department. Under the Section 1602 program, state housing entities are required to report quarterly to Treasury on subawards made, including the number of jobs that have been or will be created or retained by projects funded by those subawards, and the number of housing units that have been or will be rehabilitated or constructed. The Summary of State Housing Credit Agencies’ Quarterly Reports posted today includes data reported through December 31, 2009; the summary shows that the 410 subawards made under the Section 1602 program are expected to fund the construction or rehabilitation of more than 23,400 low-income housing units.
FHFA PROPOSES HOUSING GOALS FOR FANNIE, FREDDIE
WASHINGTON, D.C. - February 17, 2010
The Federal Housing Finance Agency (FHFA) sent a proposed rule to the Federal Register establishing new housing goals for government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. The Housing and Economic Recovery Act of 2008 (HERA) gave FHFA authority for establishing housing goals for the GSEs. Pursuant to HERA, FHFA is proposing separate goals for GSE purchases of multifamily mortgages. Specifically, FHFA proposes multifamily goals for low-income families and for very low-income families, both expressed in terms of minimum numbers of units financed. The proposed rule will be open for public comment for 45 days from the date of its publication in the Federal Register; click here for an advance copy of the notice. Additionally, FHFA says it intends to issue two related proposed rules in the near future regarding affordable housing goals for the Federal Home Loan Banks and the GSEs duty to serve rule. Click here for more information.
BAUCUS, GRASSLEY RELEASE DRAFT JOBS BILL WITH TAX EXTENDERS
WASHINGTON, D.C. - February 11, 2010
Senate Finance Committee Chairman Max Baucus, D.-Mont., and Ranking Member Chuck Grassley, R-Iowa, today released a draft of jobs legislation called the Hiring Incentives to Restore Employment (HIRE) Act. The draft bill extends several tax provisions that expired on December 31, 2009; the HIRE Act would extend 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); extend for one year the new markets tax credit (NMTC); and extend Gulf Opportunity (GO) Zone provisions. The tax extenders are estimated to cost about $31 billion over 10 years. Sens. Baucus and Grassley list three offsets for the cost of the HIRE Act, including codification of the economic substance doctrine.
Novogradac & Company will provide regular updates via e-mail to Industry Alert subscribers regarding the progress of jobs legislation and related proposals.
In addition, Michael Novogradac, CPA, will review the proposed legislation in detail in the next Tax Credit Tuesday podcast. You will find the podcast in iTunes or online at www.novoco.com/podcast.
In the meantime, you can also follow us on Twitter @taxcreditnews and @Novogradac.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.