House Approves Sweeping Infrastructure Bill that Includes LIHTC, NMTC, HTC, RETC Provisions

Wednesday, July 1, 2020 - 2:45pm

The House of Representatives today approved a sweeping infrastructure bill, voting to send the $1.5 trillion legislation to the Senate. The Moving Forward Act (H.R. 2) includes provisions to increase the annual 9 percent low-income housing tax credit (LIHTC) allocation amount, establish a permanent 4 percent LIHTC rate, temporarily reduce the 50 percent financed-by test for bond-financed housing to 25 percent, permanently extend the new markets tax credit (NMTC) at  a $5 billion annual allocation adjusted for inflation, temporarily increase the historic tax credit (HTC) applicable percentage and delay the phasedown of the renewable energy investment tax credit (ITC) until 2026.

The bill would also provide a 150 percent first-year LIHTC award to address issues related to the COVID-19 pandemic, provide several basis boosts for LIHTC properties and provide $100 billion in supplemental appropriations for various U.S. Department of Housing and Urban Development (HUD) programs. There would be an additional $500 million NMTC allocation for the 2019 round (to $4 billion) and temporary increases for 2020 (to $7 billion) and 2021 (for $6 billion). The HTC would be temporarily increased from 20 percent to 30 percent through 2024 before beginning a phasedown back to 20 percent.

The bill now moves to the Senate, where it is expected to stall.  However, provisions from the legislation may be included in future legislation, such as the next COVID-19 response bill the Senate is expected to consider later this month.

The affordable housing provisions will be discussed at the Novogradac Affordable Housing Friday Forums, which resume July 10. The proposed NMTC extension will be a focus of the July 23 Novogradac 2020 New Markets Tax Credit Virtual Conference. The proposed HTC improvements will be featured at the Sept. 24-25 Novogradac 2020 Historic Tax Credit Conference.