Congress considers year-end bill which includes COVID-19 relief provisions, extends a number of expiring tax provisions & secures the permanent fixed 4% LIHTC

Congress considers year-end bill which includes COVID-19 relief provisions, extends a number of expiring tax provisions & secures the permanent fixed 4% LIHTC

Backed up against yet another deadline for funding the government, on December 21st Congress began final deliberations on a major spending bill that funds the federal government through September 30, 2021. The House and Senate are expected to pass the legislation and the President is expected to sign it.  The year-end bill also includes much-needed COVID-19 relief provisions and extends a number of expiring tax provisions.  The great news for us is that the final package includes the permanent fixed 4 percent LIHTC.

The effective date for the fixed 4% LIHTC reads as follows:

(b) EFFECTIVE DATE. The amendments made by this section shall apply to—

(1) any building which receives an allocation of housing credit dollar amount after December 31, 2020, and

(2) in the case of any building any portion of which is financed with an obligation described in section 42(h)(4)(A), any such building if any such obligation which so finances such building is issued after December 31, 2020.

The massive year-end package also increases LIHTC allocations in states that experienced the most serious disasters in 2020. The increase is equal to $3.50 multiplied by the number of residents in qualified disaster zones and is capped at 65 percent of the state’s 2020 credit allocation.  The bill also provides a one-year extension of the placed in service deadline and ten percent test deadline for credits in qualified disaster zones.

On the spending side, the relief bill includes $25 billion in critical emergency rental assistance and an extension of the eviction moratorium to January 31, 2021.  The Treasury Department will distribute the funds to states using a population-based formula, with small states receiving a minimum of $200 million.  Estimated allocations for each state can be found in this chart prepared by Novogradac and NLIHC.  The emergency assistance will be available to households earning no more than 80 percent of the area median income (AMI) and which show financial hardship due to or during the COVID-19 outbreak and a risk of homelessness or instability.  Households with incomes of no more than 50 percent of AMI will receive priority for assistance.

Seeing a permanent minimum credit rate signed into law will be a bright spot in what has been such a difficult year.  We are very thankful for the leadership and support of our Senate affordable housing credit champions: Maria Cantwell (D-WA), Ron Wyden (D-OR), and Todd Young (R-IN) and our House champions:  Suzan DelBene (D-WA), Jackie Walorski (R-IN), Don Beyer (D-VA) and Kenny Marchant (R-TX).  We also want to thank Speaker Nancy Pelosi, Senate Democratic Leader Chuck Schumer and House Ways and Means Committee Chairman Richie Neal (D-MA) for their commitment to affordable housing.

We look forward to the 117th Congress and working with our congressional champions to enhance and improve the affordable housing credit and anticipate an early introduction of the Affordable Housing Credit Improvement Act in the new year.  While our sponsors are reviewing the legislation for potential changes or additions, it likely will closely track the current bill.  We also look forward to visiting with new Members of Congress and new staff to educate them on the affordable housing issues and the legislation.  While we may be doing that virtually in the early months of 2021, we look forward to Capitol Hill safely reopening for in-person visits.

Should there be any developments regarding the year-end bill, we will let you know.  In the meantime, we want to thank all of you who have worked so hard in this difficult year to secure additional resources to address the housing crisis.  Without your personal contact with elected officials and your steadfast commitment we would not be celebrating our successes or have the strong bipartisan support for our agenda. You make a difference!  And, we thank our CISHA members, the ACTION campaign, and the Affordable Housing Tax Credit Coalition.  We have partnered closely with them in this Congress and look forward to continuing our joint efforts next year.


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