On Aug. 19, HUD published proposed fair market rents (FMRs) for fiscal year (FY) 2012. FMRs are used to determine payment standard amounts for several programs, including the Housing Choice Voucher program. They also affect the calculation of rent limits for the low-income housing tax credit program.
Section 2002 of the Housing and Economic Recovery Act (HERA) of 2008 requires HUD to collect certain data for low-income housing tax credit tenants. According to HERA, states are required to submit demographic data including race, disability status, and partial Social Security numbers for each person residing in low-income housing tax credit-financed units on Dec. 31 of the previous year. Specifically, they are required to collect the following data:Race;Ethnicity;Family composition;Age;Income;
The legislation signed by the President on Aug. 2 calls for a two-step increase in the federal debt ceiling plus spending cuts of about $917 billion. It also created the Joint Select Committee on Deficit Reduction, which has the goal of slashing an additional $1.5 trillion from the deficit over the coming decade. According to the plan, the committee consists of an evenly split, 12-member bipartisan “Super Committee.”
A few weeks before Congress passed the debt plan on Aug. 2, U.S. Sen. Tom Coburn released his own deficit-reduction plan, which included the elimination of the low-income housing tax credit program. Ending the tax credit program would save at least $57 billion over the next 10 years, according to his 620-page “Back in Black” report, his proposal to slash the deficit by $9 trillion over the next decade. The move to eliminate LIHTCs drew a sharp response from affordable housing advocates.
The impact of low-income housing tax credits on the taxable value of real property had been a subject of controversy in Oklahoma for many years before a recent court ruling definitively stated that the credits are to be excluded from calculations of taxable value [Stillwater Housing Assoc. v. Rose, April 2011]. As a result of this decision, there may be lower tax assessments for many low-income housing properties in Oklahoma.
The IRS recently issued Notice 2011-47, which grants certain tax credit sites relief from some Section 42 requirements in the wake of devastation caused by severe storms and tornadoes in Missouri that began on April 19.
HUD released revised fiscal year (FY) 2011 income limits for certain areas on June 30. The affected areas are located in California, Colorado, Florida, Massachusetts, New York, and Puerto Rico. If your tax credit site is located in the following counties, use the revised income limits to certify and recertify your low-income households. You can find the revised figures at huduser.org.
Recently issued studies by Fannie Mae, the National Low Income Housing Coalition (NLIHC), and the Harvard Joint Center for Housing Studies (JCHS) have all highlighted the importance of preserving and expanding the supply of affordable rental housing to meet increased renter demand as more households turn to renting due to foreclosures and depressed incomes.According to the JCHS report, the need for rental housing is expected to grow dramatically, with the number of U.S. households that rent their homes increasing to 42.6 million by 2020.
A nonprofit housing group in Dallas, Texas, recently claimed that a developer schemed to defraud the government of millions of dollars in low-income housing tax credits by forging signatures, stealing building plans, and signing fraudulent tax credit applications. According to the group's federal RICO complaint, when the developer's first group of partners was “appalled” at the scheme, and refused to do it, he found others who did.
The IRS recently released its 2011 calendar-year resident population estimates. These estimates are used to determine the size of the tax credit pie that state housing finance agencies can distribute to low-income housing projects.
