After the White House’s initial draft of the Build Back Better (BBB) legislation excluded provisions to boost resources to build and preserve affordable housing, the recent version that passed through the House of Representatives now includes key provisions to enhance low-income housing resources.
The latest package calls for a post-inflation 10% increase in the total 9% LIHTC allocation cap annually each year from 2022-2024. This would provide an influx of 9% LIHTCs to housing authorities that have faced increasingly competitive award rounds. In addition, an amendment is included to reduce the tax-exempt bond financing test down from 50% to 25%, for the period 2022-2026, which will enable more projects to receive 4% tax credits and make these developments feasible. Together, these provisions would boost the total amount of both 4% and 9% tax credits for developers to use to foster the construction of more affordable housing units at a time in which housing is becoming increasingly harder to access for the most vulnerable populations.
The bill passed a vote in the House of Representatives after House Speaker Nancy Pelosi brought the bill to a vote on Friday, November 18th, which puts the bill on track to be approved in the coming weeks, boosting the supply of Federal Credits in 2022 and beyond.
Clocktower Tax Credits, LLC remains ready to assist all developer clients with up-to-date information on the policy changes to the LIHTC programs and how they dovetail with the financial planning of any specific project. If there are any questions or similar projects seeking a tax credit equity source for an ambitious development, please call Jeff Jacobson at (978) 823-0200, or email him at JJacobson@ClocktowerTC.com.