On June 4th the revised and expanded Affordable Housing Credit Improvement Act of 2019 was introduced on a bi-partisan basis in the Senate by Senators Cantwell (D-WA), Isakson (R-GA), Wyden (D-OR) (the Ranking Democrat on the Finance Committee) and Young (R-IN) and in the House by Representatives DelBene (D-WA), Marchant (R-TX), Beyer (D-VA) and Walorski (R-IN). The Senate and House bills are identical. Highlights of this legislation include:
- Provide a permanent 50% increase in Housing Credit authority and the small state minimum over current levels, phased-in over 5 years, thus building off the temporary 12% increase enacted last year.
- Establish a permanent 4 percent credit rate for bond financed properties as well as for acquisition projects.
- Remove the qualified census tract population cap, meaning that any property located in an area that qualifies as a QCT may get the basis boost; in addition, the cap on difficult development areas would be increased from 20% to 30% of the population.
- Allow Housing Credit agencies to award a discretionary basis boost to bond-financed properties.
- Require states to consider cost reasonableness in the Housing Credit award process.
- Provide states with the authority to provide a basis boost of up to 30% for properties in rural areas; in addition, base tenant income limits for bond-financed rural projects on the greater of area median income or the national nonmetro median income, thus providing parity with rules for 9% properties.
- Allow a 50% basis boost for developments serving homeless and extremely low-income households.
- Simplify the “ten-year rule” and “related party rule” in connection with acquisition credits.
- Replace the below market right of first refusal with a purchase option, generally on a prospective basis.
The above list contains the highlights of the legislation. The bill makes a total of 27 improvements to the Housing Credit program, which are summarized in the attached Fact Sheet distributed by the ACTION Coalition. The official bill language will be available in a few days.
If you have questions, please free to contact Rick Goldstein at rgoldstein@nixonpeabody.com.