LIHTC Per-Capita Multiplier Reaches $3 For the First Time
WASHINTON October 28th, 2024 – The IRS announces the per-capita multiplier for the federal 9% LIHTC will increase to $3 for the first time, marking a 10-cent increase from the previous year. Also, the small-state minimum for the 9% LIHTC will also rise to $3,455,000, up from $3,360,000 in 2024. This change represents a notable milestone in the effort to enhance affordable housing financing across the country.
The updated multiplier means that the amount used to determine states’ housing credit ceiling will now be calculated as $3 multiplied by the state population. This increase is especially significant for states with larger populations, i.e. California, Texas, and Florida as it allows for a greater allocation of resources to support the development and rehabilitation of affordable housing projects.
WASHINGTON January 17th, 2024 – Two key provisions of the Affordable Housing Credit Improvement Act (AHCIA) have been included in a bipartisan tax agreement.
After intense Congressional negotiations, the agreement calls for a temporary restoration of a 12.5% allocation increase to LIHTC as well as a temporary reduction of the 50% bond test to 30% for 2024 and 2025.
The restoration of 12.5% increase in 9% LIHTC allocations for 2023 through 2025 and the reduction in the private-activity bond financing threshold to 30% in 2024 and 2025 would finance an additional 202,573 affordable rental homes, estimates Novogradac, an accounting and advisory firm.
If enacted, the tax bill would represent the largest increase in affordable rental housing resources since 2000, says Peter Lawrence, director of public policy and government relations at Novogradac.
If Congress were to extend these policies for a full 10 years, Novogradac estimates that an additional 912,610 affordable rental homes would be financed.
Sen. Maria Cantwell (D-Wash.), a lead sponsor of AHCIA, calls the move the “biggest investment in housing in 35 years.”
The LIHTC program enhancements were initially left out of the congressional plan a week ago but were added in the last several days.
“We would not be in this bill if not for Maria Cantwell,” says David Gasson, executive director of the Housing Advisory Group and a partner at MG Housing Strategies. “She went all out for this.”
The AHCIA (S. 1557 and H.R. 3238) built strong support in Congress over the last several months, with about 30 co-sponsors in the Senate and more than 200 in the House.
“One of the key talking points for us is that you cannot have an industry go out and get this strong of bipartisan support and then not be included in the bill,” Gasson says. “That resonated with leadership on both sides.”
House Ways and Means Committee chair Jason Smith (R-Mo.) and Senate Finance Committee chair Ron Wyden (D-Ore.) announced the bipartisan tax framework Jan. 16. They said the plan would be introduced as the Tax Relief for American Families and Workers Act of 2024.
It’s been a long road, but the short version is that advocacy works, says Emily Cadik, CEO of the Affordable Housing Tax Credit Coalition.
While the core pieces of the AHCIA are in the agreement, the fight is not over. The next step would be to find a legislative vehicle for a bill to gain full House and Senate approval.
The industry should be incredibly proud that the housing tax credit provisions have made it this far, but everyone’s help is still needed to get it across the finish line, Cadik says.
While two critical pieces of the AHCIA have moved forward, other important provisions, such as a boost to serve extremely low-income tenants, are not in the plan.
However, a major tax bill is expected next year because a number of provisions that were included in the Tax Cuts and Jobs Act of 2017 will be expiring. Advocates hope this will set up the affordable housing industry to get other AHCIA provisions passed as well as to extend the 12.5% allocation increase and the lower bond test.
LOS ANGELES July 12th, 2023 – California is investing $159.9 million to keep 638 homes affordable for up to 55 more years rather than risk having them convert into market-rate units.
The awards are part of the state’s Portfolio Reinvestment Program managed by the state Department of Housing and Community Development. The program looks to extend affordability agreements by extending loan maturity dates, provide new low-interest long-term loans for rehabilitation of housing, and offer forgivable loans to support short-term operating subsidies.
In the latest funding round, awardees include:
San Francisco County:
Los Angeles County:
Santa Cruz County:
Kern County:
Sonoma County:
San Joaquin County:
Since 2022, $315.3 million has been awarded to preserve 1,364 affordable homes, ensuring housing for nearly 27,000 people over the life of the developments’ affordability agreements, according to state officials.
COLUMBIA June 21, 2023 – Governor McMaster signed a Joint Resolution (S. 739/R. 76) related to Federal Low Income Housing Tax Credits and State Tax Credits. Pursuant to the Joint Resolution, SC Housing is developing a plan to allocate remaining state tax credits and fifty percent of 9% federal tax credits for certain existing developments meeting the criteria as set forth in the resolution. An update will be provided regarding the allocation plan once SC Housing submits the plan to JBRC by June 30 and receives approval. Given the delay of a final 2023 QAP and the allocations set forth in the Joint Resolution, SC Housing will not have a 9% application round for 2023. More information will be discussed regarding a 2024 application timeline (LIHTC & TEB) at the roundtable on June 27th. SC Housing will make every effort to hold an earlier round in 2024.
WASHINGTON March 22nd, 2023 – The White House budget proposal seeks a major increase to the low-income housing tax credit (LIHTC) program.
The fiscal 2024 plan calls for a $28 billion expansion in LIHTCs over 10 years as well as lowering the 50% bond test to 25%.
Under the Biden administration proposal, each state would receive $4.25 per capita in new potential credits for allocation, with a small state minimum of $4,901,620 in 2024. For 2025, the amounts would increase to $4.88 and $5,632,880. For 2026 and subsequent years, the amounts would be the same as the prior year and indexed for inflation.
The latest budget plan also calls for lowering the bond test, a move that’s been a priority for many LIHTC advocates. Under the budget plan, a building would be eligible to earn LIHTCs on the basis of 25% private-activity bond financing of the building and land. This change from 50% would apply to buildings placed in service in taxable years beginning after Dec. 31, 2023.
In addition, President Joe Biden is proposing to repeal the qualified contract provision from the date of enactment. It also seeks to repeal the “right of first refusal” safe harbor and replace it with a purchase option, saying “LIHTC investors have imposed hurdles to the use of ROFRs that allow LIHTC projects to be too easily converted to market-rate housing.”
The overall $6.8 trillion budget request includes $73.3 billion in discretionary budget authority for the Department of Housing and Urban Development (HUD), a $1.1 billion increase from the 2023 enacted level.
“This budget takes an end-to-end approach in a very complex housing ecosystem, from homelessness to homeownership, from economic development to disaster recovery,” said Adrianne Todman, HUD deputy secretary. “It relies on all of our partnerships across the country to help the people.”
Denise Muha, executive director of the National Leased Housing Association (NLHA), expressed strong support for the budget plan, noting “the administration has recognized the significant housing challenges facing low- and middle-income families and developed a comprehensive proposal that hits all of the high notes. NLHA is particularly excited about efforts to expand access to rental assistance through increasing the supply of housing vouchers and, for the first time in decades, adding to the stock of project-based rental assistance.”
While some observers say the budget faces a challenge in the Republican-controlled House, other pundits disagree.
HUD Awards $3.16 Billion to Public Housing Authorities
The funding will go toward modernizing public housing across the country.
(WASHINGTON, DC February 22nd, 2023) The Department of Housing and Urban Development (HUD) announced $3.16 billion in funding to nearly 2,770 public housing authorities (PHAs) in all 50 states, the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands. The grants will be used to make important capital investments in the public housing stock.
“As I have traveled the country, I’ve heard time and again from families and seniors in public housing that a decent home in a safe community shouldn’t be too much to ask for,” said HUD secretary Marcia L. Fudge in a statement. “With this investment today, we are committing to work with our public housing authority partners to guarantee homes in public housing are worthy of the families and individuals who live there.”
The grants are provided through HUD’s Capital Fund program, which offers annual funding to PHAs to build, renovate, and/or modernize the public housing in their communities. Housing authorities can use the funding to complete large-scale improvements, such as replacing roofs or making energy-efficient upgrades to heating systems and installing water conservation measures.
WASHINGTON December 15th, 2022 – 124 bipartisan US lawmakers have pledged support for the Neighborhood Homes Investment Act (NHIA), which would offer a tax incentive to developers to minimize their risk when building or rehabilitating existing housing. If passed, the legislation could lead to the development of 500,000 starter homes in struggling communities over the next decade in addition to $29.3 billion in federal, state and local tax revenues and fees, $42.9 billion in wages and salaries, and over 780,000 jobs in construction and construction-related industries.
WASHINGTON, May 16 2022 – The United States Government announced a Housing Supply Action Plan to ease the burden of housing costs over time by boosting the supply of quality housing in every community. The plan includes both legislative and administrative actions to help close the nation’s housing supply shortfall in five years. Among other provisions, the plan includes: test
Columbia, SC – 29 Jan 2022
South Carolina saw massive demand for its 4% LIHTC Credit and announced at it has limited the ability of certain developments to access the state’s 4% low-income housing tax credit (LIHTC) incentive. The stop is temporary and halts the allocation of credits until the state enacts new legislation or July 1st of this year, whichever comes first. Minutes of the meeting state the pause is because “the volume of interest in the low-income housing tax credit program and the substantial impact on the state’s general fund were both unexpected.” According to the South Carolina Revenue and Fiscal Affairs Office’s Tax Expenditure Report issued earlier this month, the state LIHTC allocated more than $25 million in fiscal year 2021-22 and was estimated for more than $84.3 million this year.
Aug. 19, 2021 (WASHINGTON) – Sweeping housing legislation announced today in the U.S. Senate would enhance the low-income housing tax credit (LIHTC) and introduced the middle-income housing tax credit (MIHTC) and neighborhood homes tax credit (NHTC).
The “DASH Act” aka Decent, Affordable, Safe Housing for All would provide an expansion of 9% LIHTC annual allocation, provide a 50% basis boost for properties for extremely low-income renters; reduce for four years the 50% financed-by test for tax-exempt-bond-financed properties, provide a potential 30% difficult development area basis boost for rural and Indian properties.
The bill, introduced by Senate Finance Committee Ronald Wyden (D-Oregon) would also create a 5% and 2% MIHTC for rental properties serving tenants with incomes between 60% and 100% of the area median income (AMI), create an NHTC worth up to 35% of the qualified development cost or 80% of the national median sale price for new homes, whichever is less; create a renter’s tax credit for affordable housing operators who provide housing to tenants with monthly incomes below 30% of the AMI; and create a first-time homebuyer refundable credit for 20% of the purchase price of a home up to $15,000. Senator Wyden said “Housing is a human right. Yet, millions of Americans pay more than half of their monthly take-home pay to keep a roof over their head. And more than half a million Americans don’t have housing at all,” Wyden said. “America is amidst a serious crisis of housing affordability, and it’s a big challenge that demands big, bold solutions. As housing prices skyrocket, a generation of young people are increasingly locked out of homeownership. It’s time America’s lawmakers get with the program and enact 21st century housing policies that adequately address 21st century challenges.”
We are an underwriting surety agency specializing in P&P and other bonds for LIHTC (4% & 9% and state-based programs), Market Rate developers [HUD 221 (d) (4), etc.,] and GCs. We effortlessly guide our clients through the otherwise difficult approval maze with an innate understanding of how the surety companies think, and exactly what is needed for bond approval. Headquartered in Charleston, South Carolina, we are licensed in 50 states and represent clients nationwide. LIHTC Bonds Ltd Co is an affiliate of Carolina Indemnity Group.
