Most States Have Awarded All or Most 2008 Credits, Many Well Ahead on 2009 Program, Survey Finds

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Most state allocation agencies responding to a recent survey indicated they’ve committed all or most of their 2008 low-income housing tax credits. Few have remaining 2008 application deadlines before year-end.

The survey also revealed many states are well along in the groundwork for their 2009 low-income housing tax credit (LIHTC) credit programs, and a number have already held application rounds and/or committed some 2009 credits.

Thirty-nine state housing credit agencies responded to the early July survey, by the Tax Credit Advisor, on their 2008 and 2009 LIHTC programs and activity. (For state-by-state results, see charts on pp. 20-21.)

The responding states, as of their survey response date, had awarded an aggregate of $373.6 million, or 70%, of their total available 2008 credits of $536.3 million, and had $168.5 million left. They received total requests for $1.4 billion in 2008 housing credits, or 2.6 times the amount available. The awarded credits will fund 665 projects with 32,661 low-income and 2,192 market-rate units.

Eighteen states reported they’ve awarded all their 2008 housing credit authority. Some in fact exceeded 100% of their per capita authority when counting returned and other credits.

An additional five states had awarded nearly all of their credits: Arkansas, and Oregon, 99% each; Indiana and Wisconsin, 98% each; and Utah, 94%. Another seven had awarded 51%-90%: Massachusetts, Alaska, New Hampshire, West Virginia, Idaho, New York, and Oklahoma.

Eight states had awarded less than 50% of their credits.

A few responding states, however, were soon about to announce awards of a significant portion if not all of their 2008 housing credits: Nevada, Texas, North Carolina, and South Carolina. Some states were also in the midst of current funding rounds.
Only a handful of states reported they have remaining application deadlines for 2008 credits before year-end. Vermont has an open window, accepting applications continuously.

2009 Program Status

A number of states reported their qualified allocation plan (QAP) for their 2009 LIHTC program is adopted and is in place. These included Pennsylvania, Minnesota, Rhode Island, Nebraska, South Dakota, Alaska, and Arkansas. New York didn’t anticipate any changes to its current QAP for 2009, and Oklahoma said no changes to its QAP or rules are planned for 2009.

Many states reported they’ve issued or are now developing a draft QAP for 2009. Many, though, indicated they haven’t yet begun this process, with some noting they are now in internal discussions.

More than 20 states disclosed firm, tentative, or anticipated application deadlines for their 2009 credit funding rounds.

Ten states reported that they’re already awarded (i.e. forward committed or reserved) some 2009 housing credits, totaling about $62.8 million.

Returned Credits, Policies

State agencies were also asked to report the number and dollar amount of 2007 and 2008 credit reservations that have been returned to them. The purpose was to measure the degree to which the sharp reduction in LIHTC pricing and curtailment in housing credit equity over the past eight months or so is negatively affecting proposed projects with funding gaps, to the point where sponsors are turning in their reservations. The survey results indicated not much of this happening. Most responding states said they haven’t had any cases of returned credits; those that did for the most part mentioned just one.

The states were also asked to describe what if any policy steps or actions they’ve taken or are taking to ensure the viability of projects with 2007 or 2008 credit awards that now have funding gaps. Those indicating they have or are taking steps or actions reported a variety of measures. But quite a few states noted they haven’t taken any new policy steps or actions, generally explaining that there hasn’t been a need so far.

(To view state-by-state responses to questions about returned credits and policy actions, go to http://www.housingonline.com/Documents/surveyjul08.pdf)