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    Affordable Housing Credit Improvement Act of 2019

    June 5, 2019

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    By Richard Goldstein

    The new Affordable Housing Credit Improvement Act of 2019 has been introduced.
    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.

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