On February 28, over 80 organizations signed a letter to Congress supporting a legislative fix to facilitate the use of the Coronavirus State and Local Fiscal Recovery Fund (SLFRF) program with the Low-Income Housing Tax Credit (Housing Credit) program. The letter urges Congress to take action and amend the law to allow SLFRF resources to be used for long-term loans to Housing Credit-financed developments, especially given the rising costs in construction, supply chain delays, and workforce disruptions caused by Covid-19 have put Housing Credit developments at risk.
Many state and local governments have attempted to use SLFRF resources as gap-financing for Housing Credit properties, but current requirements have made this difficult and sometimes impossible. While SLFRF can be used as grants, the use of this funding as long-term loans for Housing Credit properties would problematically reduce a property’s eligible basis (the number used to calculate total tax credits awarded). The Treasury rules also prohibits the funds from being used as principal for loans with maturities beyond 2026. To address these issues and open up this resource for use with the Housing Credit, Enterprise is working with our partners to advocate for a legislative fix, in addition to seeking further agency guidance.