April 15, 2019 |
Updated April 17, 2019
The Internal Revenue Service (IRS) on April 3 issued guidance that coordinates the general public use requirements for multifamily housing bonds with those of the Low-Income Housing Tax Credit (LIHTC).
The guidance will enable LIHTC developments financed with multifamily housing bonds to provide for specified occupancy restrictions or preferences (e.g., housing preferences for veterans) without violating general public use requirements. Prior to the guidance, the LIHTC program enabled developments to set aside units for tenants with special needs; those of a specified group under a Federal or state programs that supports housing for such a group; or those involved in artistic or literary activities. However, there was no corresponding provision for multifamily housing bonds, making it difficult to complete 4 percent LIHTC deals designed to serve qualified populations without violating public use requirements.
NAA and NMHC are pleased the IRS issued this guidance. In addition, NAA and NMHC believe that Congress should strengthen the LIHTC program by: (1) making permanent and augmenting by an additional 50 percent the increased credit authority enacted in March 2018 to enable the production of new units; and (2) establishing a minimum 4 percent credit rate.