Capital Briefs

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Tax Credit Advisor, September 2009:

HUD Publishes Proposed Fair Market Rents for FY 2010

The U.S. Department of Housing and Urban Development (HUD) has published proposed Fair Market Rents (FMRs) for Fiscal Year 2010, with public comments due by 9/2/09. FMRs are used to determine: payment standard amounts for HUD’s Housing Choice Voucher program; initial renewal rents for some expiring project-based Section 8 contracts; and initial rents for Housing Assistance Payment contracts under HUD’s Moderate Rehabilitation Single-Room Occupancy program.

(http://edocket.access.gpo.gov/2009/E9-18507.htm)

HUD Permits Waivers for Section 223(f) Projects

HUD has issued a new notice (H 09-08) giving HUD Multifamily Hub Offices temporary authority to waive the normal “three-rule rule” for projects applying for HUD Section 223(f) multifamily mortgage insurance. Eligibility for a 223(f) loan is extended to projects originally constructed or substantially rehabilitated less than three years prior to the date of application for a firm commitment for HUD mortgage insurance. The notice says this temporary relief is designed to provide liquidity to recently built or rehabilitated, self-sustaining projects “unable to secure permanent long term financing due to the freeze in the capital markets.”

(http://www.hud.gov/offices/adm/hudclips/notices/hsg/files/09-08hsgn.doc)

CBO Cites LIHTC, Bonds Among Revenue-Raising Options

The repeal of the low-income housing tax credit (LIHTC) and the curtailment of tax-exempt bonds are two of 188 revenue-raising and -losing budget options mentioned in a new report by the Congressional Budget Office (CBO).

The report, Budget Options: Volume 2, estimates that repeal of the LIHTC would increase federal revenues by $5.9 billion over 2010-14 and $29.2 billion over 2010-19. Eliminating the tax-exempt treatment of interest on newly issued private activity bonds would save $24 billion over 2010-19.

CBO said the report’s options aren’t recommendations by CBO, but rather have been gathered for lawmakers from a variety of sources, such as legislative proposals, the President’s budget, etc. Other cited budget options include elimination of federal grants for weatherization and energy conservation, and of the Community Development Financial Institutions Fund.           

(http://www.cbo.gov/ftpdocs/102xx/doc10294/08-06-BudgetOptions.pdf)