Housing Credit Update

A couple of changes in the prospects for the Low Income Housing Tax Credit program in the last few days.

The Tax Credit Exchange (i.e. 1602 Grants in Lieu of Tax Credits) program was not extended in the final “tax extender” compromise bill that passed the Congress yesterday.

This program was used as leverage by the state last year to obtain hundreds of additional tax credit units for Extremely Low Income Texans, and funded many of the LIHTC developments that moved forward last year.  TDHCA announced at the board meeting today that they had closed on 100% of the existing Exchange funds, and that 40% of the funds had been drawn.

The removal of this funding source will be a challenge to the LIHTC program over the next year.

Here in Texas, the Texas Sunset commission adopted their final report on TDHCA’s sunset process yesterday.  The LIHTC program was the most contentious issue, garnering several amendments to the staff reports.  We’ll have more comprehensive TDHCA a sunset-recap post next week, but one of the most notable changes was a recommendation that the “Legislator Letters” be removed from the QAP scoring.  Rep. Hodges was referenced in the discussion.  The staff recommendation that neighborhood association letters be replaced with letters from local city council or county commissioners court was tweaked, with neighborhood association letters maintained in the mix, although at a lower point value than currently in statute.

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