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ARKANSAS, TENNESSEE ISSUE SECTION 1602 10%, 30% TEST GUIDELINES

Friday, November 12, 2010 - 8:00AM

The Arkansas Development Finance Authority (ADFA) and Tennessee Housing Development Agency (THDA) have issued guidelines for developers with allocations of low-income housing tax credits (LIHTCs) and Section 1602 tax credit exchange grants.

In an October 29 memo, ADFA informs developers with allocations of LIHTCs and Section 1602 grants that the 30 percent carryover-basis test required by the exchange program can be submitted in lieu of the 10 percent carryover-basis test required by the ADFA’s qualified allocation plan (QAP). ADFA reminds developers that they must incur or expend by December 17, 2010 more than 10 percent of the reasonably anticipated basis of their development by December 31, 2011. Additionally, if any of the buildings are placed in service by December 31, 2010, a completed final cost certification submitted by December 17, 2010 may be submitted instead.

Similarly, THDA announced on November 10 that developers with allocations of LIHTCs and Section 1602 grants could submit their 30 percent carryover-basis test in lieu of the 10 percent carryover-basis test required by the THDA’s QAP. The 30 percent test must be satisfied by December 31, 2010 and the test forms, which are available on the THDA web site, must be submitted by January 5, 2011.

Questions about these requirements, or the requirements in other states, can be directed to [email protected]. Additional information about the test requirements can also be found on the Affordable Housing Resource Center on the Recovery Act Hot Topics page.

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