Housing Credit at NCSHA’s HFA Institute
Getting the Year Started in Harmony
Snowy days and early darkness…swollen credit card balances and New Year’s resolutions… certain things can always be counted on at this time of year. Among these is the National Council for State Housing Agency’s (NCSHA) annual Housing Finance Agency (HFA) Institute held in Washington, DC in early January. I thought I’d share with you some of the highlights of the gathering, specifically from the Housing Credit portion of the week.
The good news is that happy days appear to be here again for the LIHTC program! Experts report that 2010 was a great year for tax credits and noted that it was the first where we returned to a pure credit allocation without the Tax Credit Assistance Program (TCAP) and Section 1602 or Tax Credit Exchange Program funding. Credit pricing even rose ten cents on the dollar, on average, over the year, which represents a tremendous comeback. The investors have returned, making for a much-needed year of stabilization. Even though debt reduction is all the buzz in our nation’s capitol, the President’s Debt Reduction Commission has pledged not to touch programs that would affect low-income populations, so LIHTC should be safe at least for the time being. All industry professionals are urged to help educate Congress, especially the newest 20% elected to office in November, on the benefits and successes of our tax credit properties to aid in keeping the program healthy.
Among the sessions covering hot topics of LIHTC compliance, a number of presentations stood out as being especially informative. Income limits for LIHTC continues to cause a stir due to the past few years of regulatory upheaval and increased complexity of usage. HUD representatives were on hand to explain the details of their currently employed methodology for determining income limits and provided some interesting facts that I plan on writing more about in future articles. The bottom line being that the data now used should provide for more stable estimates of income over time, which of course will be a welcome change from the recent volatility.
Another noteworthy development was the suggestion that an online industry clearinghouse be created for processes, procedures and forms across all state housing finance agencies. Wouldn’t that be a treat for everyone? This idea was batted around during several sessions, so NCHM will keep you posted on where it goes. In addition, there were discussions about the LIHTC data collection requirement from HERA. HUD reports that they have just completed their first cycle and that the state agency submission deadline for 2010 data will be September 30, 2011. No doubt your state agency has issued new forms and/or guidelines for gathering this information from your tax credit property(ies). If not, we suggest you contact them to find out what needs to be done.
Finally, two of the most exciting news items came out of the last sessions of the Housing Credit Institute, the first being the announcement that NCSHA’s plans to revise their Recommended Practices for LIHTC Compliance. Initially created in 2000, this decade old list of best practices which includes a number of Recommended Practice Forms is in dire need of rehabilitation, especially with all of the regulatory changes from the last three years. They have recently completed the revision to their Recommended Practices for LIHTC Underwriting and plan on moving to the compliance side forthwith.
We will naturally stay on top of these developments as well.
And, I am so excited about this one that I’ve determined it deems its own paragraph – the White House Domestic Policy Council (DPC) has recently set up a Rental Policy Working Group (RPWG) to help answer the age old question, “Why can’t the federal government get their act together?” It consists of an interagency effort by HUD, USDA and the Department of Treasury to identify inconsistencies, burdens and inefficiencies and then make recommendations for improvement in federal housing programs. Hip, hip hooray, but you’ll need to wait until next month to learn more. In February I’ll write about this new “Harmonization Program” which will hopefully move our industry toward greater peace and agreement in 2011. Now isn’t that a nice way to start the year?