Friday, September 11, 2009 - 8:00AM

In a request for comments scheduled for publication in the Federal Register on September 14, the U.S. Department of Housing and Urban Development (HUD) invites comments from the public on whether it should discontinue its policy of maintaining Section 8 income limits for certain areas at previously published levels when reductions would otherwise have resulted. The policy was implemented to avoid jeopardizing the financial feasibility of existing housing projects in instances where program rents were tied to Section 8 income limits.

The Housing and Economic Recovery Act of 2008 (HERA) implemented a project-level hold-harmless provision for multifamily projects financed with low-income housing tax credits (LIHTCs) and tax-exempt private activity bonds, also referred to as Multifamily Tax Subsidy Projects (MTSPs). In the September 14 notice, HUD says this provision precludes the need for it to continue the policy for the benefit of MTSPs; should HUD discontinue the hold harmless policy, MTSPs are protected by the new statute from decreases in income limits and rents. However, other federal programs and the determinations of difficult development areas (DDAs) for the LIHTC program would be affected if the policy is discontinued.

The details of this proposal will be discussed in the next Tax Credit Tuesday Podcast; tune in on September 15 to learn more.

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