Bill to Support LIHTC Program Introduced
Capitol Hill
Memo to Members: Vol 15, No. 8, February 26, 2010
On February 24, Representative Linda Sanchez (D-CA) introduced H.R.4687, the Low Income Housing Tax Credit Exchange Expansion and Job Creation Act of 2010. This legislation would extend the 9% Tax Credit Exchange Program (TCEP) created by the American Recovery and Reinvestment Act of 2009 (ARRA) and improve that program to enable affordable housing projects to move forward. The bill would also provide an exchange program for the 4% credit, providing financing for much needed preservation activities.
The House passed an extension of the 9% credit in December 2009 (see Memo, 12/11/09 ). The 9% exchange program allows state tax credit allocating agencies to trade a portion of their tax credits for cash and use that cash to finance affordable housing. H.R. 4687 would improve on that legislation by making technical corrections to make the 9% exchange program more effective.
The bill would also expand TCEP to include the exchange of 4% credits and allow developers to return allocations of mortgage revenue bonds associated with the exchanged credits, and use taxable financing instead, if they can demonstrate that the bonds cannot be sold on reasonable terms or that replacing the bonds with taxable financing would likely lead to the creation of more affordable housing. The 4% credit is used in connection with development or rehabilitation activities involving other federal funds, including housing bonds. ARRA did not include an exchange program for the 4% credits.
Advocates will be contacting their member of Congress to ask them to cosponsor H.R. 4687.
H.R. 4687 was referred to the Committee on Financial Services, and to the Committee on Ways and Means.
