House and Senate Conference Agreement on LIHTC Provisions
As concerns continue to grow over the future financial support that will enable developers to pay for new construction and the rehabilitation of multi-family affordable housing sites, the House and Senate have reached a compromise on funding for LIHTC programs as part of the new economy recovery bill.
The House bill that passed on January 28 would have temporarily allowed state housing agencies to exchange some credits for federal grants, which they would have distributed to developers. Will Fischer, in an article for the Washington, D.C.-based Center on Budget and Policy Priorities, cited this exchange option as “the most cost-effective way to promptly and reliably restore LIHTC-funded affordable housing production.” The Senate version did not include this exchange option, but provided $2 billion in grants to be used in conjunction with tax credits, but would allow investors “to claim their credits more quickly after the housing is built.”
According to an update from the Center on Budget and Policy Priorities, the compromise version provides $13.6 billion in total HUD funding (down from the $16.3 billion in the House version and up from the $11.6 billion in the Senate’s), and includes:
- $250 million for privately owned assisted housing energy retrofit (for Section 202, 811, and project-based Section 8 housing), with an additional affordability period requirement of 15 years;
- $2.25 billion, allowed by HOME’s formula, to state LIHTC agencies; and
- $69 million to allow states to exchange unsold 9 percent low-income housing tax credits from previous years, and up to 40 percent of 2009 9 percent credits for 85 cents on the dollar.
For more information, go to http://www.cbpp.org.