NCSHA and Novogradac Release Analysis on Impact of Lowering “50 percent test” for Bond-Financed Housing Credit Developments

Last month, the National Council of State Housing Agencies (NCSHA), in partnership with Novogradac, released an analysis on the projected impact of lowering the “50 percent test” bond financing threshold  for 4 percent Housing Credit developments on affordable multifamily housing production. Currently, multifamily developments financed with tax-exempt Housing Bonds are eligible to receive 4 percent Housing Credits if these bonds finance at least 50 percent of total project costs, including land. The analysis projects that lowering the bond financing threshold would result in the production of additional Housing Credit units. For example, lowering the bond financing threshold to 40 percent would free up nearly $37.5 billion in bond authority over the next decade, resulting in the production of over 355,000 additional units. The report provides estimates of additional affordable homes if the bond test were to be lowered to 40 percent, 33 percent, or 25 percent. Lowering the “50 percent test” bond financing threshold for 4 percent Housing Credit developments is one of the ACTION Campaign’s key proposals for immediate relief. Click here to read NCSHA and Novogradac’s analysis .

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