Tiberi-Neal bill can and should create permanent credit floor for LIHTCs

Almost a month since it was introduced, my eyes continue to be on H.R. 1142, the bill introduced by Congressmen Pat Tiberi (R-OH) and Richard Neal (D-MA) that will, if passed, create a permanent credit floor in both 9% and 4% LIHTC programs. The bill currently has 19 additional co-sponsors, including 11 Republicans and 8 Democrats.

“I’ve seen first-hand the benefits of the Low-Income Housing Tax Credit during my visits to low-income housing developments in my district,” Congressman Tiberi said, when introducing the bill. “It’s an effective, successful program and by making a permanent floor on the credit rate, we’re creating certainty for developers to create construction and renovation jobs while increasing housing availability for more low-income families, veterans, seniors, and individuals living with disabilities.”

The 9% LIHTC for new construction and substantial rehabilitation has consistently been upheld by congress, through numerous extensions. However, the minimum credit rate has expired and should be renewed. Without the permanent floor on the credit rate, LIHTCs are now underwritten using a floating rate that results in substantially less – as much as 20% less – Housing Credit equity available for any given project.

That permanent floor on credit would certainly allow states like Delaware and Maryland to allocate credits more effectively and make affordable housing development more financially feasible, and stable, for developers.

The congressmen say they have the support of more than 350 national, state, and local organizations, including the Affordable Housing Tax Credit Coalition. Bipartisan support should make it happen.

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