IRS Authorizes LIHTC Owners to Provide Emergency Housing for Disaster Victims

Filed in Disaster Response by on September 29, 2017 0 Comments

The Internal Revenue Service (IRS) announced Thursday that the owners and operators of low-income housing tax credit (LIHTC) projects may use vacant units to provide emergency housing to individuals, regardless of income, displaced by a major disaster.

In addition to normally applicable LIHTC income limits, the IRS has authorized owners and operators to disregard transience rules, or requirements for a minimum length of occupancy. To qualify for these “waivers,” owners must work in conjunction with the applicable state/local housing agency. Likewise, owners of residential rental projects funded with section 142 bonds may work with bond issuers to have certain requirements waived in the case of providing emergency housing.

Although owners and operators of low-income housing projects may offer temporary housing, they are not required to do so. For those who do, however, special rules apply. These are detailed in Revenue Procedure 2014-49 and Revenue Procedure 2014-50.

The notice applies to all low-income housing projects anywhere in the United States and all individuals displaced by a major disaster who lived in a county or other local jurisdiction designated for individual assistance by the Federal Emergency Management Agency. Currently, this includes parts of Texas, Florida, Georgia, Puerto Rico and the U.S. Virgin Islands.

The guidance also notes that individuals affected by recent major disasters other than Hurricanes Harvey, Irma and Maria—such as those impacted by wildfires, tornadoes and other storms—may also qualify for emergency housing relief. The relief automatically applies as soon as the president declares a major disaster and FEMA designates any locality for individual or public assistance. This temporary relief extends for one year after the president declares a major disaster, or through August 2018. For a list of recent disasters and designated areas, see the IRS disaster relief page.

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