Late last night, House Republicans released tax legislation addressing retirement savings, extenders of expiring tax provisions, disaster relief, and technical tax corrections. The bill is the first step in what are likely to be negotiations over an end-of-the-year tax package. The bill includes a provision NCSHA has sought to clarify that preferences and/or restrictions for veterans in Housing Credit properties, including bond-financed properties, are not a violation of the Credit or Bond programs’ general public use rules.
In recent months, it has come to our attention that some bond counsel, based on conversations with IRS officials, have raised concerns that the general public use requirements for the multifamily bond program do not allow for an exception for veterans of the U.S. military, and thus bond-financed projects that provide a preference for or serve only veterans violate the rule. The bill clarifies the exemption for veterans under the Housing Credit program and modifies the section of the tax code that deals with multifamily bonds to clarify that the general public use rule for multifamily bonds mirrors that of the Housing Credit.
The House is expected to pass the bill by the end of this week, at which point it will go to the Senate. We expect further negotiations between the chambers on the bill over the next couple of weeks, which could provide an opportunity to advance additional Housing Credit priorities, including those in the Affordable Housing Credit Improvement Act. We will keep you abreast of all developments and when to contact your members to advocate for our Housing Credit priorities.