Notes from Novogradac

Published by Peter Lawrence on May 18, 2022

The Biden administration on Monday announced its Housing Supply Action Plan, which is designed to close the housing supply shortfall in five years. This plan includes the creation and preservation of hundreds of thousands of affordable homes in the next three years. By addressing the significant and growing deficit of the availability of affordable homes, the administration also hopes to address the persistent problem of inflation, as housing costs make up about one-third of the main inflation indicator—the Bureau of Labor Statistics’ consumer price index, and the lack of affordable homes is significantly contributing to the rise of inflation.

Published by Peter Lawrence on May 11, 2022

Novogradac’s New Markets Tax Credit (NMTC) Mapping Tool, created to display NMTC eligibility, has been updated to include NMTC project qualified low-income community investment (QLICI) data from the Community Development Financial Institutions (CDFI) Fund’s public data release that includes the total number of QLICIs in each state and congressional district from fiscal year (FY) 2003 through FY 2019. The current update of the NMTC Mapping Tool provides an interesting view of NMTC investments made since the tax credit’s inception. 

Published by Thomas Stagg on May 4, 2022

Nine percent low-income housing tax credit (LIHTC) properties located in a rural area as defined by the U.S. Department of Agriculture have two options when calculating income limits. These properties are able to use the greater of the applicable income limit for their county or the National Non-Metro Median income (NNMI) limit. 

Published by Michael Kressig on April 28, 2022

The Internal Revenue Service recently posted a topical tax brief about qualified rehabilitation expenditures (QREs)–that includes information on flood adaptation costs, as well as clarifications about certain renewable energy costs.

Published by Michael Novogradac on April 21, 2022

The end of the 10% basis step-up benefit for investments in qualified opportunity funds (QOFs) didn’t appear to slow equity raised for investment in opportunity zones (OZ), at least according to the first-quarter update of QOF equity raises tracked by Novogradac.

Published by Mark Shelburne, Peter Lawrence on April 20, 2022

New analysis from Novogradac shows that the LIHTC is not contributing to the segregation of low-income households and there is more diversity in siting, particularly among newly constructed properties. While regulatory barriers to building new affordable rental housing exist in many low-poverty communities, especially in those with few people of color, such barriers apply regardless of whether the building is financed by LIHTCs.

Published by Brent Parker on April 19, 2022

The Internal Revenue Service (IRS) last week announced it will send letters to certain opportunity zones (OZ) stakeholders who need to take action to either maintain their certification as a qualified opportunity fund (QOF) and to taxpayers who need to ensure their investments in QOFs reach the standard to qualify for OZ incentive tax benefits.

Three letters will go out to QOFs for two different reasons. All letters will require action upon receipt.

Published by John Sciarretti on April 19, 2022

The Opportunity Zones Transparency, Extension and Improvement Act, H.R. 7467/S. 4065, introduced April 7 responds to widespread agreement across the industry and in Congress on the need for reporting on the targeted impact of investments in opportunity zones (OZs) and implementing change to better incentivize investment in underserved communities.

Published by Thomas Stagg on April 19, 2022

The U.S. Department of Housing and Urban Development (HUD) posted fiscal year (FY) 2022 income limits April 18 to determine eligibility for HUD-assisted programs, such as for public housing, Section 8, Section 221(d)(3) and Section 236 properties. HUD also published Multifamily Tax Subsidy Projects (MTSP) income limits to determine eligibility for the low-income housing tax credit (LIHTC) and tax-exempt bond properties.

Published by Peter Lawrence on March 31, 2022

Ever increasing inflation has threatened economic recovery, making targeted financial assistance for low- and moderate-income (LMI) communities even more important. The House Financial Services Committee on and the Senate Banking, Housing and Urban Affairs Committee convened three hearings this year to discuss federal support for Community Development Finance Institutions (CDFIs) and Minority Deposit Institutions (MDIs), highlighting these organizations’ unique ability to effectively distribute targeted financial support to communities in need.