HFAs and their partners have produced nearly 2 million affordable rental homes with equity provided by the Housing Credit.  Housing Credits are allocated by states to developments they select pursuant to qualified allocation plans (QAPs) they develop that identify the type, location, and other characteristics of affordable housing needed throughout the state. The strong statewide focus, sophisticated finance underwriting, and asset management capacity of the State Housing Finance Agencies, together with strong private sector partnerships, have created some of the highest quality, most innovative housing ever produced with federal assistance.
 
In 2008, Congress made a number of important changes in the Housing Credit program which will enhance its effectiveness and provide for more affordable housing, including providing additional Housing Credit authority, exempting Housing Credits from the Alternative Minimum Tax (AMT), fixing the 70 percent present value Credit at 9 percent, and giving states flexibility to provide state-designated developments a 30 percent Housing Credit “basis boost.”
 
However, the current economic downturn has dramatically reduced investor demand for Housing Credit investments. This lack of equity capital could have resulted in thousands of critically needed affordable rental units not being built or preserved. Congress responded to this need by providing $2.25 billion in formula grants to states through the Tax Credit Assistance Program (TCAP) and by allowing states to exchange some of their 2009 Credits for cash to make up for equity gaps in Credit developments. Advocating for support for the Housing Credit program is one of NCSHA’s 2011 Legislative Priorities.