Notes from Novogradac
The release of Fannie Mae’s and Freddie Mac’s Securities and Exchange Commission 10-K filings for 2017 show that while single family volume decreased over 2016, multifamily volume increased.
With the award of calendar year 2017 new market tax credits (NMTC), the total amount allocated through the program stands at $54 billion. The CDFI Fund allocated $3.5 billion in tax credit authority to 73 community development entities (CDEs), which are again expected to invest more in operating businesses than real estate projects, continuing a trend that began in 2011. This round, the funds awarded to CDEs investing in operating businesses and real estate accounted for $3.419 billion of the total $3.5 billion awarded.
The Trump administration released its $4.4 trillion fiscal year (FY) 2019 budget request Feb. 12, which includes $716 billion in defense discretionary spending and $540 billion for nondefense discretionary spending, a cut of $49 billion from FY 2018 spending cap and $57 billion from the FY 2019 spending cap. Of the nondefense discretionary budget, the administration requested $41.2 billion (including $2 billion as proposed in the FY 2019 budget addendum) in gross U.S.
The understanding of equity and equity pricing can help guide understanding and effects of policy, as well as a glimpse at what proposed changes could mean for affordable housing production.
An observational study Novogradac & Company is conducting suggests anticipation of a reduction in the corporate tax rate has already reduced production of affordable housing by approximately 11 percent.
Small area fair market rent (SAFMR) were required to be implemented in 23 areas beginning Jan. 1. In addition, SAFMRs were already being used in Dallas, Texas, bringing to 24 the number of areas required to use SAFMRS.
Real estate economics are key drivers in the success or failure of mixed-use developments, even those using equity from historic tax credits (HTCs) and new markets tax credits (NMTCs)–something that’s becoming more and more evident as Novogradac & Company LLP provides market analysis for clients on a broad range of mixed-use properties. More and more investors, lenders, developers and others are recognizing the importance of deeper understanding of the real estate market.
Consider one recent investor who asked, “How many boutique hotels does one small town need?”
With the release in September of 2016 American Community Survey (ACS) data, Novogradac & Company was able to estimate the national median income, state median incomes as well as low-income housing tax credit (LIHTC) income limits for many areas for 2018 and 2019.
About the Calculations
The (ACS) is an integral part of HUD’s calculation of area median income. The 2016 ACS data will be used by HUD to calculate the 2019 income limits for LIHTC and Section 8 properties.
As 2018 begins it is a time to reflect and ask ourselves the important life changing questions like when will HUD publish income limits and will my limits increase or stay the same. Although we don’t have a crystal ball below is some need to know information about the FY 2018 HUD income limits.
When will income limits be released?
Understanding HUD’s income limits can be a difficult endeavor. Terms like high housing cost or and state non-metro median adjustment can turn off even the most ambitious user. However, this primer will help better explain how HUD determines income limits.
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