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Journal of Tax Credits Volume 3 Issue 11
The November 2012 issue of the Novogradac Journal of Tax Credits.
In the recent past, developers often neglected due diligence in an effort to close deals. It was not uncommon 10 years ago for developers of historic tax credit (HTC) projects to skip this step, and the tax credit investors rarely investigated the project themselves. Due diligence is not a new concept, however. It is simply doing one’s homework, checking and rechecking the pro forma’s veracity and logic. It is a necessary step for sound real estate development performed by sound real estate developers, and tax credit investors are realizing its importance in projects.
The weeks following Election Day on Nov. 6 will be a busy time for lawmakers as they begin to adjust to the postelection landscape. In addition to the presidential race, voters will elect governors in 13 states and territories and the members of the new 113th Congress, who will shift gears from campaigning for election to vying for committee assignments.
As it begins to feel the effects of the Section 1603 program’s expiration, the renewable energy tax equity market is at a critical juncture. Although the grant program expired last December, most developers lined up Section 1603 deals to see them through the better part of this year and delayed the return to traditional tax credits. “That’s going to shift right now,” said Dirk Michels, partner at K&L Gates.
The U.S. Department of Housing and Urban Development (HUD) issued fair market rents (FMRs) for HUD fiscal year (FY) 2013 on Oct. 4. FMRs in FY 2013 increased for the majority of the country. The FY 2013 FMRs are higher than the FY 2012 FMRs for approximately 89 percent of counties and lower for approximately 11 percent of counties. The average change in counties is an increase of 8 percent. This is in stark contrast to the FY 2012 FMRs, in which 70 percent of counties experienced a decrease from the FY 2011 FMRs and the average change was a decrease of 3 percent.
The National Multi Housing Council and the National Apartment Association led a group of eight other industry members in responding to the Internal Revenue Service’s (IRS’s) proposed rule that would alter current regulations on utility allowances for low-income housing tax credit (LIHTC) properties.
The U.S. Department of Housing and Urban Development (HUD) announced the expansion of its low-income housing tax credit (LIHTC) pilot program.
The Kansas Department of Commerce ended Kansas Main Street, a program that provided guidance and funding to small communities to revitalize their historic commercial districts.
Reps. Ted Poe, R-Texas, and Mike Thompson, D-Calif., introduced H.R. 6437, the Master Limited Partnerships Parity Act
On Aug. 16, the U.S. Government Accountability Office (GAO) released its housing assistance report, “Opportunities Exist to Increase Collaboration and Consider Consolidation.”