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Novogradac Journal of Tax Credits Volume 2 Issue 6

The June 2011 issue of the Novogradac Journal of Tax Credits.

Journal cover June 2011

Articles

Michael J. Novogradac

Wednesday, June 1, 2011

As discussions about the national deficit, federal spending and tax reform deepen and grow in number, budget hawks are dissecting all categories of government expense, including tax expenditures such as the low-income housing tax credit (LIHTC). Lawmakers may not be content to cut discretionary spending on the appropriations side alone and have begun proposing reductions to tax expenditures, which they describe as “spending in the tax code,” as a way to increase federal revenue.

Jennifer Dockery

Wednesday, June 1, 2011

When Congress reauthorized the New Markets Tax Credit (NMTC) program in late December, community development entities (CDEs) breathed a sigh of relief. Market activity had increased in 2010 and the CDEs expected a stronger 2011. When the Novogradac Journal of Tax Credits spoke with 21 allocatees in April, the CDEs were seeking projects and investors for an additional $3.5 billion in NMTC allocations. Many CDEs expressed cautious optimism about the state of the NMTC market, reporting that credit prices had risen, investors were back and debt was available. Yet they also said that smaller NMTC allocations and the program’s temporary nature were negatively affecting the market.

John Leith-Tetrault

Wednesday, June 1, 2011

On June 1, the Historic Tax Credit Coalition and Rutgers University released their annual study on the economic impact of the federal historic tax credit (HTC). This year’s update shows that the federal HTC continues to outpace other economic activities such as highway construction, manufacturing and service sector industries in its ability to generate jobs, labor income, taxes and gross domestic product. This is clearly good news for the HTC industry as it continues to raise the profile of the HTC in Congress and lobbies for modernization of the Section 47 credit.

Scott E. Fireison

Wednesday, June 1, 2011

The U.S. Department of Housing and Urban Development’s (HUD’s) Mark-to-Market (M2M) restructuring program has matured fully under its administration by the Office of Affordable Housing Preservation (OAHP) and the passage of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (MAHRAA). M2M-restructured projects now represent a large portion of the national portfolio of Section 8 subsidized affordable housing. Many restructured projects have reached a need for substantial rehabilitation, and their Section 8 Housing Assistance Payments (HAP) contracts were generally renewed for 20-year terms and set for stable annual rent increases pegged to HUD’s annually published inflation adjustment - operating cost adjustment factor (OCAF). Given that, we have seen ever increasing activity in M2M project acquisition and redevelopment with and without tax credit proceeds.   

Amanda Talbot

Wednesday, June 1, 2011

Question:  A household has applied to live in a low-income housing tax credit (LIHTC) unit. There are three individuals that will be moving into the unit. The head of the household currently fosters a 16-year-old child and her 19-year-old brother who is a foster adult. The head of the household receives income from the local welfare agency for the care of these individuals. The 19-year-old foster adult is employed part time while attending school at the local university. The 16-year-old foster child has a savings account that earns interest. Which of these income sources should be included in the income calculation for this household?


News Briefs

Wednesday, June 1, 2011

Fannie Mae released two white papers that outline the company's multifamily rental activities and the outlook for affordable rental housing and the small multifamily loan market.

Wednesday, June 1, 2011

In the wake of severe storms and tornadoes in April, the Alabama Housing Finance Authority (AHFA) issued procedures for low-income housing tax credit (LIHTC) property owners to participate in temporary emergency housing relief.

Wednesday, June 1, 2011

The U.S. Department of Housing and Urban Development (HUD) requested public comments on a proposed assessment of Native American, Alaska Native and Native Hawaiian housing needs.

Wednesday, June 1, 2011

The California Senate passed a bill that would require a seven-year sunset provision and specific objectives to be included in any bill enacting a new tax credit in 2012.

Wednesday, June 1, 2011

The Community Development Financial Institutions (CDFI) Fund announced that the new markets tax credit (NMTC) program was selected as one of 25 programs that will advance to the final stages of competition for the Innovations in American Government Award.

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