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Thursday, December 8, 2022

The U.S. Department of Housing and Urban Development (HUD) this week updated its map for qualified census tracts (QCTs) and difficult development areas (DDAs) to reflect areas that are effective Jan. 1, 2023.

Friday, December 2, 2022

The U.S. Department of Housing and Urban Development (HUD) announced that it will use 2021 American Community Survey (ACS) data to determine fiscal year 2023 (FY23) median family incomes and income limits for low-income housing tax credit (LIHTC) properties. HUD will release the FY23 information on or about May 15, 2023, which is approximately six weeks later than normal.

Friday, December 2, 2022

The Virginia Department of Taxation amended regulations concerning the housing opportunity tax credit, the state’s low-income housing tax credit (LIHTC). Among the amendments and clarifications are that taxpayers with unused credits can carry them forward up to five years and that the state can carry forward up to 15% of annual credits. Awardees of 9% LIHTCs can amend their application to a 4% LIHTC in connection with their points and rankings for the state credit and in doing so, change their requested federal LIHTC amount. The amended regulations prioritize 4% LIHTC developments not yet placed in service that have funding gaps. The regulations also prioritize $20 million of state LIHTCs annually for areas in areas with populations of 35,000 or fewer residents. The amendments include a clarification that awards made in 2021 are unchanged by proposed amendments for 2022.

Thursday, December 1, 2022

The Internal Revenue Service (IRS) will publish an announcement in the upcoming Internal Revenue Bulletin reminding state and local low-income housing tax credit (LIHTC) agencies that disaster-related credits for calendar years 2021 and 2022 cannot be carried over to years after 2022. Announcement 2022-27 applies to LIHTCs authorized in 2020 legislation, which allowed an allocation of $1.25 billion in disaster-area credits to 11 states and Puerto Rico for use in the construction or rehabilitation of buildings in qualified disaster areas.

Tuesday, November 29, 2022

The Internal Revenue Service (IRS) will publish a notice in Wednesday’s Federal Register providing guidance on the prevailing wage and apprenticeship requirements that allow bonus credit percentages for certain renewable energy provisions of the Inflation Reduction Act (IRA). The notice also provides guidance for determining the beginning of construction date for certain credits. Under the IRA, properties that meet prevailing wage and apprenticeship requirements qualify for the 30% renewable energy investment tax credit (ITC) and the $26 per megawatt-hour production tax credit (PTC).

Monday, November 28, 2022

Bipartisan legislation introduced in both houses of Congress would allow college students who have experienced homelessness or are currently homeless to live in properties financed by the low-income housing tax credit (LIHTC). The Housing for Homeless Students Act of 2022 (S. 5108 and H.R. 9313) would change LIHTC regulations–which currently do not allow tenants to be full-time students.

Tuesday, November 22, 2022

A group representing more than 2,400 public and private organizations involved in affordable housing–including Novogradac–sent on Monday an open letter to Congress calling for an increase in low-income housing tax credit (LIHTC) allocation authority. The letter from the A Call to Invest in Our Neighborhoods (ACTION) Campaign called on Congress to expand LIHTC authority by 50% (or at least reinstate the 12.5% increase to LIHTC authority) and to lower the financed-by bond financing threshold for affordable housing from 50% to 25%. The letter called for those moves to be made before the end of 2022.

Wednesday, November 16, 2022

Legislation introduced in the Texas House of Representatives would amend the state’s ranking system for low-income housing tax credit (LIHTC) applications to include whether the units in a development have air conditioning. H.B. 191 would make whether a property has air conditioning the 11th scoring criteria in order of importance. It would also require any statement of support from a state representative about a property applying for LIHTC allocation to disclose the percentage of units owned by the applicant that are equipped with air conditioning.

Friday, November 11, 2022

The Internal Revenue Service (IRS) will publish a notice in Monday’s Federal Register requesting comments on IRS Form 8609 and 8609-A. Form 8609 is filed by owners of low-income housing tax credit (LIHTC) properties for each building in a multiple-building project and to certify certain information. Form 8609-A is filed to report compliance with LIHTC provisions and calculate the LIHTC. No changes are proposed to the current forms and the review is for an extension of the current forms. Written comments should be received by Jan. 13, 2023.

Thursday, November 10, 2022

The U.S. Department of Housing and Urban Development (HUD) has updated a workbook that allows public housing authorities (PHAs) to assess the eligibility of a proposed rehabilitation of a property for a Rental Assistance Demonstration (RAD)/Section 18 construction blend or an opportunity zones (OZ) rent boost. The workbook, which compares proposed rehabilitation costs against housing construction costs (HCC) published by HUD, includes HCC data for 2020, 2021 and 2022. HUD will update the workbook as additional HCC data becomes available.

Tuesday, October 25, 2022

The U.S. Department of Housing and Urban Development (HUD) published a Federal Register notice designating 2023 difficult development areas (DDAs) and qualified census tracts (QCTs) for purposes of the low-income housing tax credit (LIHTC). LIHTC properties built in a DDA or QCT are qualified to increase their eligible basis by up to 30%. The notice, mandated by law, designates DDAs for all states, the District of Columbia, Puerto Rico, Guam, the Northern Mariana Islands and the U.S. Virgin Islands. The notice also designated QCTs based on income and poverty data released in the American Community Survey. The 2023 DDAs and QCTs are effective for LIHTC allocations made after Dec. 31, 2022, or for buildings placed in service after Dec. 31, 2022, if those buildings are financed with tax-exempt bonds.

Monday, October 24, 2022

The Internal Revenue Service (IRS) will allocate more than $5.4 million of unused low-income housing tax credits (LIHTCs) to 27 states. Revenue Procedure 2022-37 provides $5,423,591 in unused credits. The largest recipient is California, just shy of $1 million at $982,548; Vermont at $16,166 sits on the opposite end of the spectrum. The 2022 amount marks a dip from the $7.8 million in carryover LIHTC allocation announced in 2021, which was the highest total in more than two decades. National demand for the LIHTC remains robust and unused authority should not be confused for general lack of demand. The allocation process sometimes results in LIHTC authority too small to be allocated to affordable housing developments.

Tuesday, October 18, 2022

The per-capita multiplier for 9% low-income housing tax credits (LIHTCs) will increase 15 cents to $2.75 for 2023, based on Revenue Procedure 2022-38, the largest such increase without a legislative cause since the credit began being adjusted for inflation in 2003. The Internal Revenue Service (IRS) released the revenue procedure today. Along with the per-capita jump for 9% LIHTCs, the small state minimum will jump to $3,185,000, the private activity bond (PAB) multiplier will increase to $120 and the small-state minimum for PAB cap will be $358,845,000. All three are substantial increases from 2022 figures. The only 9% per-capita increases higher than the 2023 figures were due to legislative increases: the Housing and Recovery Act in 2009 and the Consolidated Appropriations Act of 2018.

Monday, October 17, 2022

The Montana Governor’s Housing Task Force transmitted Friday its final report to Gov. Greg Gianforte of its recommendations and strategies to increase the state’s supply of workforce housing, including creation of a state affordable housing tax credit; regulatory reform and investments in workforce development and private-sector home construction. The state housing tax credit would be tied to local zoning reform, alleviating the construction of subsidized housing in areas where local government agencies address zoning barriers that limit housing supply. The report includes comments fielded from the public during the past two weeks since a draft of the report was issued. It is the first of two reports; the latter is due Dec. 15 to Gianforte and will focus on recommendations for regulatory changes and best practices that could be adopted by state agencies and local governments.

Friday, October 7, 2022

Novogradac offers a trove of resources for private companies and nonprofits to learn more about the new final and temporary regulations on the average-income set-aside for low-income housing tax credit (LIHTC) properties issued today by the Internal Revenue Service (IRS) and U.S. Department of the Treasury, including a new Notes from Novogradac blog post about the release.

Friday, October 7, 2022

The Internal Revenue Service (IRS) today released final and temporary regulations on the average-income set-aside for low-income housing tax credit (LIHTC) properties. The new guidance removes the “cliff test” and allows unit redesignations based on a wide range of justifications.

Tuesday, October 4, 2022

A preliminary draft report by the Montana Governor’s Housing Task Force calls for the creation of a state affordable housing tax credit; regulatory reform and investments in workforce development and private-sector home construction. The report will be submitted Oct. 15 to Gov. Greg Gianforte.

Wednesday, September 28, 2022

California Gov. Gavin Newsom today approved legislation to streamline oversight of affordable housing compliance in the state by requiring three state administrative agencies to enter a memorandum of understanding (MOU) to coordinate their compliance monitoring. A.B. 2006 requires the Department of Housing and Community Development, California Housing and Finance Agency and the California Tax Credit Allocation Committee to coordinate efforts and ensure that only one state agency conducts physical inspections for a particular property. The MOU must be signed by July 1, 2024.

Wednesday, September 28, 2022

Novogradac has resources available for private companies and nonprofits affected by Accounting Standards Codification (ASC) 842, which changed lease accounting standards. The change–which took effect Jan. 1 for fiscal years beginning after Dec. 15, 2021–affects the way certain contracts are accounted for under generally accepted accounting principles, particularly entities that are lessees. Rather than disclosing operating leases in notes to financial statements, but not on balance sheets, the new guidance requires lessees to record a right-of-use asset for the leased asset and a corresponding lease liability equal to the financial obligation over the lease term, as well as new disclosure requirements.

Tuesday, September 20, 2022

Affordable housing developments have seen unexpected cost increases averaging 30% in recent years, and state housing finance agencies have taken extraordinary actions to help them, according to a report released today by the National Council of State Housing Agencies (NCSHA). Filling Funding Gaps: How State Agencies are Moving to Meet a Growing Threat to Affordable Housing, produced by Abt Associates for NCSHA, analyzed trends in 11 states and conducted interviews with officials and developers in other states. The report concluded that nearly all properties awarded low-income housing tax credits (LIHTCs) from 2019 to the present have faced “significant, unexpected cost increases after being awarded credits.” NCSHA calls for Congress to increase funding for HOME housing block grants and to expand the LIHTC incentive before this session ends in December.