Senate Passes Housing Credit Modernization Legislation

The United States Senate has passed H.R. 3221, The Housing & Economic Recovery Act of 2008, by a vote of 72 to 13.  The final bill will now go to the White House for the President’s signature.  Last week the Administration dropped its veto threat aimed at the Housing & Economic Recovery Act of 2008 so it is likely the President will sign the legislation quickly.

Coalition president, Ronne Thielen , Centerline Capital Group expressed appreciation for the industry’s extraordinary efforts noting “[This is] a resounding vote of support!” Thielen also added “There’s more work ahead to assist in the implementation of the new sections of Section 42 but I see this as a terrific opportunity to push past the doldrums we have been in with investor interest and project feasibility.”

As previously reported, the final legislation includes a section of provisions related to the Low Income Housing Tax Credit (Housing Credit) program many of which were included in the Coalitions list of legislative priorities for 2008.  A copy of the legislation and an explanation of the Housing Credit related provisions are attached. The Housing Credit provisions begin on page 602 in Division C – Tax Related Provisions, Title I – Housing Tax Incentives.  Specifically, the Housing Credit provisions included in the legislation would (not an exhaustive list):

• Allow a temporary $0.20 percent per capita increase in Housing Credit Authority for 2008 and 2009 with a 10 percent increase to the small state minimum. 

   

• Exempt Housing Credit investments from the alternative minimum tax (AMT)

   

• Eliminate the Housing Credit recapture bond requirement and replace it with a reporting requirement

   

• Temporarily fix the annual Housing Credit percentage at 9 percent.

   

• Allow a 30 percent increase in eligible basis for properties determined by state allocating agencies as needing additional Housing Credits to achieve financial feasibility

   

• Provide clarification on the general public use requirement 

The legislation also includes provisions designed to provide relief to Fannie Mae and Freddie Mac and provisions regarding the Community Development Block Grant program.

The Coalition will notify its members as soon as the legislation becomes law.

If you require additional information or have questions concerning this legislation please contact Coalition legislative counsel Jim Miller (202-282-5724 or jfmiller@winston.com) or Coalition executive director Victoria Spielman (202-282-5349 or victoria.spielman@taxcreditcoalition.org).