Novogradac Journal of Tax Credits Volume 11 Issue 7

Federal historic tax credits (HTCs) are a well-documented source of financing for all types of real estate. 

According to the Solar Energy Industry Association, solar power is among the fasting growing industries. While the COVID-19 pandemic weighs heavily on the solar industry, legislation passed in New Mexico offers a promising future. 

Developers and investors in affordable housing and community development have continued to find ways that the federal opportunity zones (OZ) incentive can be used to provide affordable and mixed-income housing options in low-income census tracts. 

In the first major Community Reinvestment Act (CRA) regulatory reform in 25 years, the Office of the Comptroller of the Currency (OCC) released a final rule on implementation of the CRA that will weaken incentives for bank financing for affordable housing and community development (CD). 

The National Bureau of Economic Research publicly proclaimed June 8 what everyone already knew, that the economic fallout from the COVID-19 pandemic drove the United States into a recession, one that officially began in February.

The Internal Revenue Service published in the May 22 Federal Register proposed amendments to Treasury Regulation 1.47-7 concerning the historic tax credit (HTC)

The Internal Revenue Service (IRS) issued a notice May 17 to extend the continuity safe harbor for renewable energy production tax credit (PTC) and investment tax credit (ITC) properties that began construction in 2016 or 2017. Notice 2020-41 adds an extra year to the four-year continuity safe harbor in existing guidance, stating that those projects placed in service within five years will be deemed continuous. The extension is due to industrywide delay in the supply chain caused by the COVID-19 pandemic. The notice also extended the 3½-month continuity safe harbor for taxpayers to satisfy the beginning-of-construction requirements to include any services or property received by Oct. 15, 2020. ***According to a notice published May 13 by the IRS, the PTC for electricity produced by wind will remain 2.5 cents per kWh in 2020. The IRS notice specifies that the PTC for wind–as well as closed-loop biomass and geothermal energy–will stay at the same level as 2019. The notice includes PTC amounts for various other sources of energy. 

The U.S. Small Business Administration, in consultation with the U.S. Treasury, announced May 28 that it set aside $10 billion exclusively for community development financial institutions (CDFIs) to lend under the second round of funding for the Paycheck Protection Program (PPP). Treasury said that dedicating a portion of the PPP funds to CDFIs will further ensure that PPP reaches communities in need. ***The CDFI Fund released a notice May 28 opening the fiscal year 2020 round for the Capital Magnet Fund (CMF). Through the CMF, the CDFI Fund will award up to $173.8 million in grants to CDFIs and nonprofit organizations to finance affordable housing and related economic development and community service facilities. The deadline to submit CMF application materials through the CDFI Fund’s Award Management Information System is July 27 at 5 p.m. ET.***The CDFI Fund published a notice in the May 7 Federal Register seeking feedback on new forms and reports that will be used to certify, evaluate and recertify CDFIs. CDFI Fund director Jodie Harris explained in a May 6 announcement the revisions to the CDFI certification application and the annual certification and data collection report and certification transaction-level reporting. Comments on the changes must be submitted by Aug. 5. ***The Barton Academy Foundation announced a $14 million funding milestone May 20 for the renovation of historic Barton Academy in Mobile, Ala. The former school will be transformed into the Barton

The U.S. Department of Housing and Urban Development (HUD) announced the allocation of $1 billion in funding May 1 to states for COVID-19 relief through the Community Development Block Grant program.

The Connecticut Housing Finance Authority (CHFA) announced guidance on May 12 for developers to seek extensions and relief in connection with low-income housing tax credit allocations affected by the COVID-19 pandemic.