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Novogradac Journal of Tax Credits Volume 3 Issue 11

The November 2012 issue of the Novogradac Journal of Tax Credits.

Journal cover November 2012

Articles

Michael J. Novogradac

Thursday, November 1, 2012

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.

Jennifer Hill

Thursday, November 1, 2012

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. While there may not be as many investors in the renewables space as there were during the pre-recession economic boom, experts report that both the market and the technology have matured and are continuing to attract significant investment despite the end of the grant program.

Mike Hannon

Thursday, November 1, 2012

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.

John M. Tess

Thursday, November 1, 2012

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. As the marketplace rekindles, investors are hiring historic preservation consultants to verify their HTC projects. The following pages explore the most common problem areas for HTC projects and provide a breakdown of the due diligence process.


News Briefs

Thursday, November 1, 2012

On Aug. 16, the U.S. Government Accountability Office (GAO) released its housing assistance report, “Opportunities Exist to Increase Collaboration and Consider Consolidation.”

Thursday, November 1, 2012

The Hanna Building Annex in Cleveland’s theater district received new market tax credits (NMTCs) from nonprofit group Cleveland Development Advisors, which also provided a loan to the project until it receives historic tax credits (HTCs).

Thursday, November 1, 2012

The CDFI Fund announced an information collection on July 23 regarding the NMTC Community Development Entity (CDE) Certification Application.

Thursday, November 1, 2012

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.

Thursday, November 1, 2012

The U.S. Department of Housing and Urban Development (HUD) announced the expansion of its low-income housing tax credit (LIHTC) pilot program.

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