NCSHA Blogs
NCSHA Presses for Changes to IRS Housing Credit Average Income Test Proposed Rule
Today, NCSHA submitted comments to the Internal Revenue Service (IRS) urging it to make changes to the Low Income Housing Tax Credit (Housing Credit) Average Income Test (AIT) minimum set-aside regulations the Service put forth in a recent Notice of Proposed Rulemaking. NCSHA worked closely with Housing Credit leaders in Congress on developing the concept of the AIT and drafting the legislative language, which first appeared in the Affordable Housing Credit Improvement Act of 2016 and was eventually enacted as part of the Consolidated Appropriations Act of 2018. Unfortunately, the IRS AIT proposed rule sets what NCSHA believes to be an unnecessarily rigid standard for meeting the AIT minimum set-aside, creating excessive risk to investors and likely negatively impacting interest in AIT properties. It also stymies practical implementation of the AIT by preventing owners from changing unit income designations over time, even if such changes are needed to comply with other housing program rules or if the lack of such flexibility creates conflicts with fair housing- and accessibility-related laws.
908 Coalition Plan Includes $25 Billion for Coronavirus Relief Payments for Rental Assistance
Late yesterday, the so-called 908 Coalition—a bipartisan group of centrist Senators and members of the House Problem Solvers Caucus—released the text of its $908 billion coronavirus relief plan, split into two separate bills. The first bill is a $748 billion package that includes $25 billion for emergency rental assistance and spending on other programs and has wide support on both sides of the aisle. The second bill includes the two pieces of the plan that have met with resistance from some on the Hill: liability protection—favored by Republican leadership but opposed by Democratic leadership—and $160 billion in funding for state and local governments—favored by Democratic leadership but opposed by Republican leadership.
HUD Extends HOME COVID-19 Waivers
HUD recently issued two new memoranda to revise, extend, and update the pair of memoranda issued on April 10, 2020, suspending certain statutory and regulatory requirements for the HOME Investment Partnership program and HOME-Assisted Tenant-Based Rental Assistance for Emergency and Short-Term Assistance in response to the COVID-19 pandemic.
COVID-19 Worsens Longstanding Rental Affordability Challenges According to New Harvard Report
On November 19, Harvard University’s Joint Center for Housing Studies (JCHS) released its 2020 State of the Nation’s Housing report. The report finds that, despite low interest rates and continued growth in some sectors, the health and economic consequences of COVID-19 coupled with racial tensions and climate change across the nation have exacerbated the rental supply and affordability crises.
FHA 2020 Annual Report Shows FHA’s Impact on First-Time and Minority Homeownership
On Friday, the Federal Housing Administration (FHA) released its FY 2020 Annual Report. During FY 2020, FHA endorsed more than 1.3 million home mortgage loans through its forward mortgage program, including 817,847 mortgage loans to homebuyers, 83.1 percent of whom were first-time buyers. The average forward mortgage loan amount endorsed was $232,773, a 7.4 percent increase from the FY 2019 average of $216,695. Despite robust volumes, FHA’s market share decreased from 11.56 percent in FY 2019 to 9.61 percent in FY 2020, reflective of the strong refinance activity in the mortgage market generally and FHA’s historically smaller share of refinances overall.
NCSHA Urges IRS and Treasury to Extend and Expand Housing Credit COVID-19 Relief
NCSHA sent the Internal Revenue Service (IRS) and U.S. Department of the Treasury (Treasury) a letter today urging them to extend the temporary Housing Credit relief provided by IRS Notice 2020-53 and to make other necessary program accommodations in light of the continuing disruption the COVID-19 pandemic is having on development and construction activities and the ongoing operation of Housing Credit properties.
NCSHA Releases 2020 Election Analysis
As of this writing, who will win the presidential election and which party will control the Senate in the next Congress remain uncertain, though the mist appears to be clearing slightly. Final outcomes could be determined in the next few days or could take substantially longer, especially if Senate control depends on one, or possibly two, Georgia Senate runoff elections to be held in January. NCSHA election analysis linked here goes into more detail on the election results and our analysis of them.
IRS Publishes Average Income Test Proposed Rule
On October 29, the IRS published a notice of proposed rulemaking on the Housing Credit Average Income Test (AIT) minimum set-aside for public comment. The regulations, once finalized, would provide guidance on implementation of the AIT, as established by the Consolidated Appropriations Act of 2018 (2018 Act), which allows owners of Housing Credit properties (for purposes of the tax code, the “taxpayer”) to elect to serve households earning as much as 80 percent of area median income (AMI), as long as the income designations of the units in the property average no more than 60 percent of AMI. The proposed rule would modify existing Housing Credit regulations for the “next available unit rule” at Section 1.42-15 and establishes a new regulation for the AIT at Section 1.42-19.
IRS Publishes Housing Credit and Private Activity Bond 2021 Volume Cap Amounts
On October 26, the Internal Revenue Service issued Revenue Procedure 2020-45, providing the 2021 per capita and small state minimum levels for the Housing Credit and Private Activity Bond (PAB) volume caps. In 2021, states will receive the greater of $2.81 per capita or $3,245,625 in Housing Credit authority.
House Leadership Issues Revised $2.2 Trillion Coronavirus Relief Bill
Late yesterday, House Speaker Nancy Pelosi (D-CA) issued a revised version of the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, cutting more than $1 trillion from the original version of the legislation the House passed in May. However, it remains to be seen whether renewed conversations among House, Senate, and White House negotiators will result in further coronavirus relief action before the election, as thus far Republicans have resisted spending as much as proposed in the revised bill.
