February 10, 2012
Affordable Housing Alert
HUD has announced a new Multifamily Low Income Housing Tax Credit Pilot Program to implement the Housing Tax Credit Coordination Act of 2008. The guidelines for the pilot are set forth in HUD Notice H 2012-1 and Mortgagee Letter 2012-1, both dated February 3, 2012. HUD is adapting the Section 223(f) mortgage insurance program to be the vehicle for the pilot, by both increasing the program’s parameters and expediting application processing. Ordinarily, the Section 223(f) program cannot be used for substantial rehabilitation projects; however, HUD is expanding its usual concept of moderate rehabilitation to allow certain tax credit projects to take advantage of the streamlined 223(f) process. Notice H 2012-1 also extends the 3-year rule waiver for the 223(f) program for an additional year beyond its February 2012 expiration.
The first phase of the pilot will be limited to certain HUD offices with tax credit experience. The pilot is available for: (i) permanent financing for recently constructed projects, (ii) preservation and moderate rehab for Section 8 properties, and (iii) re-syndication projects. The key features of the Pilot include:
We believe that the pilot presents an exciting opportunity to take advantage of FHA and LIHTC financing in a more efficient manner, and we look forward to working with developers and HUD to successfully implement it.
The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.