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Even in small, rural towns like Mount Airy, NC, the shortage of affordable housing for low-income residents is a pressing issue. In Mount Airy, the issue was addressed and solved, according to developer Jim Sari, of The Landmark Group, based in Winston-Salem, NC, through the conversion of a vacant historic former tobacco warehouse into apartments using a combination of state and federal low-income housing tax credits and historic tax credits.

The financial rescue bill signed by President Bush on 10/3/08 contained provisions that extend the federal new markets tax credits and various federal renewable energy tax credits, and provide additional low-income housing tax credits and tax-exempt bond authority for areas hit by major natural disasters.

he Community Development Financial Institutions (CDFI) Fund on 10/20/08 announced the award of $3.5 billion in federal new markets tax credit (NMTC) allocations to 70 community development entities (CDEs) in the program’s sixth funding round.

The IRS is soliciting comments by 12/23/08, and announced a public hearing for 1/22/09, on a new proposed regulation for the federal new markets tax credit program specifying how an entity serving certain targeted populations can meet the requirements to be a qualified active low-income community business.

The U.S. Department of Housing and Urban Development (HUD) published a Federal Register notice on 9/3/08 containing an updated list of geographic areas in the U.S. that qualify as difficult development areas (DDAs) under the low-income housing tax credit program.

New York State Gov. David Patterson recently signed legislation (A.11226/S.7553) that authorizes a new tax abatement for the construction of “green” roofs on buildings in New York City. Under the pilot, which runs until 3/15/13, building owners who install green roofs on at least 50% of available rooftop space can apply for a one-year property tax credit from the city.

The Arizona Department of Housing (ADoH) is soliciting applications by 11/14/08 for new funds available under its State Housing Fund Program.

For Holy Cross School, the federal new markets tax credit truly has provided shelter from the storm. Hurricane Katrina, that is. When the hurricane slammed New Orleans in August 2005, the 125-year-old Catholic school – run by the same order than operates the University of Notre Dame – was one of its victims. The school campus and its buildings, located in the city’s Lower Ninth Ward, were flooded and heavily damaged, forcing the school to relocate to temporary quarters, initially in Baton Rouge, to continue operations.

Last month, I wrote about some of the common areas of confusion and errors regarding compliance requirements under the low-income housing tax credit program. This confusion among owners and property managers has, in my experience, been evidenced by misinterpretations and actions that have or potentially may lead to noncompliance findings. Part 2 of this article touches on some additional areas of confusion and mistakes.

One section of the new Housing and Economic Recovery Act of 2008 (H.R. 3221, Public Law 110-289), entitled the “Housing Assistance Tax Act of 2008,” contains numerous changes to the federal low-income housing tax credit (LIHTC) and tax-exempt housing bond programs designed to improve their efficiency.

The Internal Revenue Service and state housing agencies in September took further steps to implement certain low-income housing tax credit (LIHTC) and tax-exempt housing bond program changes made by the new Housing and Economic Recovery Act of 2008.

Developers of tax-exempt, bond-financed, mixed-income residential rental developments typically receive significant benefits and face many challenges. These benefits include a mortgage with a lower interest rate and longer term, potential incentives from local government, access to federal low-income housing tax credits, and strong cash flow that boosts the property’s value.