Agencies Given Extension to Disburse Subawards from ARRA Funds

State housing credit agencies will be given more time todisburse funds they receive from the Treasury Department to subawardees that are acquiring or rehabilitating low-income tax credit housing sites. Under a new interim final rule, effective August 31, 2009, agencies receiving funds under section 1602 of the American Recovery and Reinvestment Act (ARRA) of 2009 have another year to continue to disburse these funds—from December 31, 2010 to December 31, 2011.

Although ARRA gives state housing credit agencies the option of receiving payments instead of low-income housing credits under section 42 of the Internal Revenue Code, the payments must be used to make subawards to finance the construction or acquisition and rehabilitation of qualified low-income buildings. If the funds are not used to make subawards or disbursed before January 1, 2011, they must be returned to the Treasury by December 31, 2010.
The interim final rule allows agencies to continue to disburse the funds past the December 31, 2010 date, only under these three circumstances:

• If the subaward was made to the subawardee on or before December 31, 2010;
• The subawardee has, by the close of 2010, paid or incurred at least 30 percent of the total adjusted basis in land and depreciable property that is reasonably expected to be part of the low-income housing project; and
• Any funds not disbursed to the subawardee by December 31, 2011, are returned to the Treasury by January 1, 2012.

Comments are due by September 30, 2009. For information, contact: Ellen Neubauer, program manager, (202) 622-0560, ellen.neubauer@do.treas.gov.