Cantwell-Hatch Bill Would Boost Low-Income Housing Tax Credit

Filed in Advocacy, Housing Finance, Multifamily by on July 15, 2016 0 Comments

redcapitolBefore adjourning for the Senate’s summer recess, Sens. Maria Cantwell (D-Wash.) and Orrin Hatch (R-Utah) introduced the Affordable Housing Credit Improvement Act (S. 3237), legislation that would increase the annual housing credit allocation by 50%, in addition to a number of critical improvements to the Low-Income Housing Tax Credit. Sen. Ron Wyden (D-Ore.) is a cosponsor of the bill.

The bill would make permanent the 4% credit rate for acquisition and bond-financed existing projects. In addition, the legislation would allow energy tax incentives to be used in combination with Low-Income Housing Tax Credits and help combat local opposition to affordable housing projects by prohibiting local approval and contribution requirements.

“The Low-Income Housing Tax Credit is the most successful affordable housing program in the nation,” said NAHB First Vice Chairman Granger MacDonald, a tax credit developer from Kerrville, Texas. “This bill will provide the program with the resources necessary to meet the nation’s affordable housing needs.”

The bill would also:

  • Provide a new incentive for projects that target homeless or extremely low income individuals and families. These projects would be eligible to receive a 50% credit boost, allowing them to remain financially feasible while targeting the neediest populations.
  • Repeal the Qualified Census Tract population cap, enabling properties in more areas to receive a basis boost.
  • Include relocation expenses in rehabilitation expenditures.
  • Allow states to determine the definition of a community revitalization plan to give them flexibility to determine local criteria.
  • Increase the amount of housing credits that developments serving extremely low-income tenants can receive in order to make developments serving the lowest-income tenants more financially feasible.
  • Allow states to award a basis-boost to housing bond-financed developments to provide additional equity when needed.
  • Provide for a purchase option that would allow non-profit and government sponsors to acquire Low-Income Housing Tax Credit properties when the current 15 year compliance period expires.
  • Require states to consider the needs of Native Americans when allocating housing credits and provide additional support to projects located in Indian areas by automatically making them eligible for an additional 30% credit boost if necessary for financial feasibility.
  • Permit broader income-mixing within housing credit developments in order to preserve rigorous targeting while providing more flexibility and responsiveness to local needs, while maintaining a 60% area median income average.

NAHB will work with its coalition partners to build support for this bill.

For more information, email J.P. Delmore at NAHB or call him at 800-368-5242 x8412.

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