We all know that student eligibility is one of the hallmarks of the Low-Income Housing Tax Credit (LIHTC) Program. From the very beginning, households consisting entirely of full-time students have not been able to qualify as eligible for LIHTC unless they meet an exception to the rule.
For many years this list included just four exceptions: Households consisting of married students who are entitled to file joint tax returns; those with single parents and children who are not claimed by third parties (other than the other parent) on their federal tax returns; households that receive assistance under Title IV of the Social Security Act (TANF); and households where at least one member is participating in an officially-sanctioned job training program. With the passage of the Housing and Economic Recovery Act (HERA) in 2008, a fifth exception was added to include households where at least one member was formerly in foster care.
On May 21, 2015, Senators Al Franken (D-MN) and Rob Portman (R-OH) introduced S. 1412, the Housing for Homeless Students Act of 2015, to the 114th Congress, which would add a sixth exception to the list if passed.
The stated purposes of the bill is “to amend the Internal Revenue Code of 1986 to qualify homeless youth and veterans who are full-time students for purposes of the low-income housing tax credit.” It would include youth experiencing homelessness within seven years prior to occupancy at a LIHTC property and veterans who have been homeless within five years of LIHTC occupancy. Other sponsors include Senators Patty Murray (D-WA), Susan Collins (R-ME) and Angus King (I-ME). The bill has now been referred to the Senate Committee on Finance. Following that, it will have to be passed by both houses of Congress and signed by the President before it becomes law.
If and when this does become part of our protocol for qualifying student households for LIHTC, one of the first practical management questions that will need to be answered is how to verify homeless student status. The bill itself does not provide guidance on this topic, so we will have to wait to see what the IRS has to say about it, if anything. Chances are that they will leave the verification requirements up to the state housing agencies.
Rest assured that NCHM will keep you informed on the status of this bill going forward, as we try to do on all important issues impacting the affordable housing industry. Here is the link to the bill if you would like to read it yourself here.