Congressmen Pat Tiberi (R-OH) and Richard Neal (D-MA) introduced H.R. 3661, a bill that would permanently extend the flat 9 percent credit rate and create a flat 4 percent credit rate for allocated LIHTCs. Additionally, Senators Maria Cantwell (D-WA) and Olympia Snowe (R-ME) have also introduced S. 1989, which is the Senate version of the same legislation.
NAHMA supports these bills. To that end, we would ask you to contact your Congressional representatives ASAP and encourage them to cosponsor H.R. 3661 and S. 1989 in their respective Chambers. Please ask your Congressmen to contact Brad Bailey in Congressman Tiberi’s office at 202-225-5355 and Senators should contact Eric Gulick in Senator Cantwell’s office at 202-224-3441 if interested in cosponsoring the bills.
For information on contacting your Congressional representatives, please visit: http://www.nahma.org/content/grassroots.html
The 9 percent flat rate credit for new construction and substantial rehabilitation LIHTCs, which was authorized by the Housing and Economic Recovery Act of 2008, is set to expire next year. The 9 percent flat rate credit has successfully removed the uncertainty and financial complexity of the LIHTC floating credit rate, simplified state administration, and facilitated development of affordable housing after HERA’s enactment. If the flat rate credit is not extended, affordable housing developments will need to be underwritten at the floating credit rate, which would mean a sudden and substantial reduction in the amount of equity that a development could receive for its LIHTC allocation. In the current budget environment where gap financing from HOME, CDBG, and other local sources are at risk, such a cut in equity would make the development of affordable housing more difficult.
Furthermore, applying a fixed credit rate for the property acquisition LIHTC at no less than 4 percent would similarly remove the uncertainty and financial complexity of the floating rate system, simplify state administration, and facilitate preservation of affordable housing at little or no cost to the federal government.
Therefore, we believe the 9 percent flat credit rate for new construction and rehabilitation LIHTCs should be extended indefinitely and a similar flat credit rate should be created for property acquisition LIHTCs.
For additional talking points on the bills, please visit: http://www.nahma.org/Leg%20area/National%20Consensus%20Letter%20LIHTC%20ACTION%208-26-11_FINAL.pdf