NCSHA Urges IRS, Treasury to Establish Emergency Measures Related to Housing Credit Administration During COVID-19 Pandemic

NCSHA, on March 23, sent the Internal Revenue Service (IRS) and U.S. Department of the Treasury a letter urging them to take immediate action to provide necessary accommodations for the Low Income Housing Tax Credit (Housing Credit) program due to the COVID-19 pandemic. These measures are essential as social distancing, which is critical to safeguarding the health of Housing Credit residents and those who work in the industry, is resulting in severe disruptions to Housing Credit production and ongoing property operations.

In the letter, NCSHA encouraged IRS and Treasury to extend by one year specific program deadlines, including deadlines for meeting the 10 percent test for carryover allocations, placed-in-service requirements, rehabilitation expenditure, and restoration after a casualty loss. We also pressed IRS to provide a 12-month moratorium on both physical inspections and tenant file reviews, extend by 12 months all open noncompliance corrective action periods, suspend the yet-to-be-implemented compliance monitoring regulations published in 2019, and provide guidance on the temporary closure of property amenities.

For more information, contact Jennifer Schwartz.

Alert: Third COVID-19 Response Bill Advances, Housing Credit Advocacy Continues

Today, the House is expected to pass the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was already passed by the Senate on March 25. The President is expected to sign it shortly thereafter. The CARES Act is the third response bill to the growing coronavirus crisis.

While the package does not include relief from certain Housing Credit statutory deadlines as ACTION had requested, these requests appear to be well-positioned for inclusion in what we hope will be further Congressional action soon.

Specifically, the ACTION Campaign and industry participants are urging Congress to provide 12-month extensions for the program’s 10 percent test, placed in service deadlines, and rehabilitation expenditure deadlines. ACTION is also urging Congress to immediately enact a minimum 4 percent Housing Credit rate, as the credit rate for bond-financed properties and acquisition is at an all time low due to historically low federal borrowing rates. This has the potential to make some properties currently in the pipeline no longer financially feasible. ACTION will continue to advocate for these statutory asks to be included in future stimulus packages.

The legislation does, however, contain numerous housing related provisions:

  • $12.4 billion in new appropriations for HUD programs:
  • $5 billion for Community Development Block Grant (CDBG);
  • $4 billion for homeless assistance through Emergency Solutions Grants;
  • $1.25 billion for Tenant-Based Rental Assistance;
  • $1 billion for Project-Based Rental Assistance;
  • $685 million for the Public Housing Operating Fund;
  • $300 million for Native American programs, including $200 million for the Native American Housing Block Grants program and $100 million for the Indian Community Development Block Grant program;
  • $65 million for the Housing Opportunities for Person with AIDS (HOPWA);
  • $50 million for the Section 202 Housing for the Elderly;
  • $50 million for additional administrative expenses incurred by HUD due to COVID-19;
  • $15 million for the Section 811 Housing for Persons with Disabilities;
  • $5 million for the HUD Inspector General to provide oversight for the additional funds being distributed; and
  • $2.5 million for fair housing activities including enforcement and outreach.
  • Forbearance of residential mortgage loan payments for multifamily properties:
  • Up to 90-day forbearance of residential mortgage loan payments for certain multifamily properties of up to 5+ units. This provision applies to all properties with mortgage loans that are insured, guaranteed, supplemented or assisted in any way by the federal government or in connection with any HUD program or related program administered by any federal agency. It also applies to loans purchased or securitized by either Fannie Mae or Freddie Mac. The language appears to make forbearance available to all Housing Credit properties.
  • Moratorium on eviction filings:
  • 120-day moratorium on eviction filings or other legal action to charge fees or penalties applicable to all properties insured, guaranteed, supplemented, protected, or assisted by the Department of Housing and Urban Development, Fannie Mae, Freddie Mac, and the rural housing voucher program, including all properties considered financed by “covered programs” under the Violence Against Women Act (VAWA) of 1994. The Housing Credit is a covered program under VAWA, and thus the moratorium on evictions applies to all Housing Credit properties.

The CARES Act also includes many programs and provisions to provide relief to individuals, businesses and state and local governments. Click here to view the full text of the CARES Act.

Housing Credit Advocacy Strategy

With the third coronavirus response bill soon to be enacted, it is likely that Congress will shift its attention to a fourth round of legislation addressing the growing crisis in the weeks ahead. The ACTION Campaign will continue its work to ensure that future legislation addresses the needs of the Housing Credit program during this time. We will also be pushing for our ongoing Housing Credit priorities, the enactment of which would contribute to economic recovery.

In the meantime, ACTION is also pursuing a parallel advocacy strategy for regulatory accommodations. ACTION co-chair NCSHA has sent a letter to the IRS that includes our programmatic deadline extension asks as well as several other Housing Credit accommodations.

Majority of House Cosponsors AHCIA!

ACTION Campaign Celebrates More Than Half of House

Cosponsoring the Affordable Housing Credit Improvement Act

March 13, 2020 – The majority of the House of Representatives has cosponsored the Affordable Housing Credit Improvement Act, H.R.3077, with a total of 221 members signed on to the bipartisan legislation. The Affordable Housing Credit Improvement Act (AHCIA) would strengthen and expand the Low-Income Housing Tax Credit (Housing Credit), our nation’s most successful tool for building and preserving affordable housing.

The AHCIA was reintroduced in the House in June 2019 by Representatives Suzan DelBene (D-WA-1), Kenny Marchant (R-TX-24), Don Beyer (D-VA-8), and Jackie Walorski (R-IN-2). In the 115th Congress, the AHCIA was cosponsored by more than 40 percent of all members of Congress. This Congress, the AHCIA rapidly garnered bipartisan support and surpassed prior levels of cosponsorship, reflecting a growing consensus that communities nationwide need more affordable housing. The AHCIA has the most bipartisan support of any bill to build more affordable housing this Congress.

“The overwhelming support for the Affordable Housing Credit Improvement Act shows that members of Congress across the country see the housing crisis we face. My bill would help create approximately 550,000 new affordable housing units nationwide in the next decade. Now that a majority in the House is on record in support of this legislation, it is time to pass it,” said Congresswoman DelBene. “The housing crisis gets worse every year, and this is an important step to helping people find an affordable place to call home. States like Washington cannot wait any longer.”

“Affordable housing is vital for keeping our communities strong, which is why I have been a strong supporter of the Low-Income Housing Tax Credit,” said Congressman Marchant. “This credit will help developers bring more affordable housing options to market, and can even be used to build housing specifically for our veterans, who have given so much to our country. With more than half of all Representatives now signed on as co-sponsors, it is time to pass the Affordable Housing Credit Improvement Act to expand and improve this credit and ensure that affordable housing is available for our vets and families of all kinds across the country.”

“Providing affordable housing is an enormous public policy challenge, and the Affordable Housing Credit Improvement Act would do so much to help,” said Congressman Beyer. “I recently toured Northern Virginia shelters and affordable housing organizations, and this is definitely an area of major need in our region and across the United States. I’m happy the bill is achieving so much bipartisan support, and hope we get a chance to vote for it on the House floor soon.”

“The Low-Income Housing Tax Credit is an important tool to drive investment in affordable rental housing and provide stability for low-income Americans, including veterans, seniors, and those with special needs,” Congresswoman Walorski said. “I’m thrilled the bipartisan Affordable Housing Credit Improvement Act is now cosponsored by the majority of the House, and I’m grateful for the hard work of my colleagues and advocates across Indiana and the country who helped achieve this exciting milestone. I look forward to continuing our work together to modernize and streamline the affordable housing credit to make an already successful program even more effective and give workers and families a better opportunity to achieve the American Dream.”

A model public-private-partnership, the Housing Credit has financed 3.2 million affordable homes and served 7.4 million low-income households since the program’s inception in 1986. By strengthening and expanding the Housing Credit, the AHCIA would provide for more than half a million additional affordable homes nationwide over the next ten years.

The ACTION Campaign is a broad, national coalition calling on Congress to protect, expand, and strengthen the Housing Credit, and has proudly played a lead role in the advancement of the AHCIA. We thank the more than 2,300 national, state, and local organizations that are part of ACTION and have helped secure a record level of bipartisan cosponsors.

The ACTION Campaign calls on the remaining members of Congress to cosponsor the AHCIA, and for Congressional leadership to advance this bill and provide communities with the Housing Credit resources necessary to build and preserve more affordable housing.

Click here to view a full list of the AHCIA cosponsors.

Fannie & Freddie Forbearance Program, Ban on Evictions

Monday the FHFA announced that Fannie and Freddie will offer a forbearance program on all their multifamily loans. However, no evictions can take place during the term of the forbearance. Please click here for more information: https://www.novoco.com/sites/default/files/atoms/files/fhfa_moves_to_provide_eviction_suspension_relief_for_renters_in_multifamily_properties_032320.pdf

OHFA HOME Application Deadline Extended

As the risk of exposure to COVID-19 continues to increase in the State of Oklahoma, the National Housing Trust Fund and HOME Application training previously scheduled for March 16, 2020 was cancelled. A video of the training will be posted to OHFA’s website no later than April 4, 2020.

OHFA will begin accepting Applications for HOME Program Year 2020 on April 1, 2020, for all activities.

OHFA has extended the deadline to submit HOME Applications to be considered at the July 15, 2020 Board Meeting from May 1, 2020 to May 15, 2020.

OHFA Proposed Rules Changes for 2021 LIHTC Program & Board of Trustees Meeting

Coalition Members:

The Oklahoma Housing Finance Agency has reinstated the regularly scheduled Board of Trustees meeting for Wednesday, March 25, 2020 at 10:00am. This meeting will be held via teleconference. The public may access the teleconference remotely by dialing 631-992-3221 and entering access code 478-393-539. Please click on this link to access the agenda for meeting: https://www.ok.gov/ohfa/About_OHFA/Board_of_Trustees_Agendas/March_2020_Teleconference_Meeting.html

Of important note is Agenda Item 4.4 on the Consent Docket. This is changes to the Rules for the tax credit program. You may view the proposed changes by clicking here:

danette.carr or Darrell.beavers or by regular mail to the Oklahoma Housing Finance Agency.

Unfortunately, due to the short time frame, the Coalition is unable to gather consensus items for submission.

ACTION Recommendations in Response to COVID-19

FROM THE ACTION Campaign

Correction: Please see the correct ACTION letter here.

Responding to the COVID-19 Crisis

First and foremost, we hope that everyone is taking care to stay healthy. Each day brings new developments, and we are all doing our best to navigate these unchartered waters. There are so many unexpected consequences stemming from the COVID-19 crisis, and that includes threats to the housing stability of millions of low-income Americans.

While the ACTION Campaign will always continue to advocate for the Affordable Housing Credit Improvement Act, we have to be rapidly adaptive and responsive as new challenges arise. As many of you know, the COVID-19 crisis and response measures may – and in some cases already have – result in consequential disruptions in transactions and construction for a variety of reasons including understaffed lenders, suspended site inspections, broken supply chains for materials, and local suspensions on construction. Congress is moving quickly to pass COVID-19 relief packages, and therefore we have to act swiftly to advocate for critical federal actions that can help the stability of the Housing Credit program.

With the help of many of our Steering Committee partners, we quickly identified and developed immediate statutory recommendations for Congress to include in the next COVID-19 relief package. The Housing Credit program has a number of programmatic deadlines required under the Internal Revenue Code that we expect could be difficult or impossible to meet as the pace of development is being slowed down. ACTION urges Congress to provide a one-year extension for three key program deadlines:

  • 10 percent test deadlines. Currently, at least 10 percent of the anticipated basis of a development must be expended within one year of the Housing Credit allocation. We propose temporarily extending this deadline to the end of the second year of allocation for properties that received Housing Credit allocations between December 31, 2016 and January 1, 2022.
  • Placed in service deadlines. Buildings must currently be placed in service by the end of the second year after the calendar year of the Housing Credit allocation. We proposed temporarily extending this deadline to the end of the third year after the calendar year of allocation for properties that received Housing Credit allocations between December 31, 2016 and January 1, 2022.
  • Rehabilitation expenditure deadlines. These are currently required to be placed in service within 24 months. We propose temporarily extending the rehabilitation expenditures deadline to be met at the close of 36-months.

ACTION also recommends that Congress enact a minimum 4 percent Housing Credit rate to bolster future production and preservation of affordable housing. With federal borrowing rates effectively zeroed out in response to COVID-19’s economic impacts, the 4 percent Housing Credit rate is at an all-time low of 3.12 percent, and will likely dip even further next month. Enacting a minimum 4 percent Housing Credit rate would provide parity to the 9 percent Housing Credit rate, for which Congress enacted a minimum rate as part of the response to the 2008 economic collapse in recognition of the critical role of affordable housing in the recovery.

We have sent this ACTION letter to key Congressional offices, as we understand that drafting of the next relief package is well underway. We welcome you to echo these important statutory fixes.

We know the landscape is still changing, that new challenges will emerge, and that there are other important ideas being developed – and we encourage you to share them with us. We will be developing a longer list of statutory asks for future relief packages. We will also be developing a comprehensive list of regulatory asks for the IRS. If you have ideas to share, please email Sarah Brundage at sbrundage and Jennifer Schwartz at jschwartz.

As a reminder, ACTION’s next field call is scheduled for Friday, April 3, at 2 pm EST. We will keep you updated with major developments in the meantime. You can also find updates and resources at the following websites:

Please do not hesitate to reach out to us with other developments, concerns, questions, or suggestions.