Pressure Builds to Include LIHTC Priorities in COVID Relief Package
As Congress begins work on its next coronavirus relief package, various groups are urging lawmakers to include provisions in the legislation that will provide relief to LIHTC owners and developers. The National Association of Home Builders (NAHB) recently sent a letter to House and Senate leaders urging lawmakers to expand eligibility to the Paycheck Protection Program (PPP) so that developers and multifamily property owners are eligible to participate in this loan program and to have their loans forgiven. The NAHB also encouraged lawmakers to establish a permanent minimum 4 percent credit floor for acquisition and bond-financed projects through the Low-Income Housing Tax Credit.
In Congress, more than 60 representatives have signed on to a letter urging House leadership to include Housing Credit priorities in the next COVID-19 response package. The bipartisan letter is being led by Reps. Suzan DelBene (D-WA) and Jackie Walorski (R-IN). They are co-leads of the Affordable Housing Credit Improvement Act (AHCIA), and the letter specifically urges Congressional leadership to include:
- Enacting a minimum 4 percent Housing Credit rate;
- Providing additional basis boosts to allow developments to access additional equity if needed for financial feasibility;
- Allowing developments to access 4 percent Housing Credits by lowering the “50 percent test;” and
- Increasing the annual Housing Credit allocation by at least 50 percent, phased in over two years, and adjusted for inflation, beginning in 2021.
In addition, Senate Republicans have released their COVID-19 response proposal, which would provide additional direct payments, extended but reduced unemployment insurance benefits, changes to and additional funding for the Paycheck Protection Program, additional flexibility for already allocated state and local funding, business and school liability protections, and school funding. While LIHTC provisions were not included, the Senate Republican proposal is considered a starting point for further negotiations between the Senate and House that will take place over the coming weeks.