NCSHA Reviewing Recommended Practices for LIHTC Underwriting, Allocation

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Tax Credit Advisor, August 2010: The National Council of State Housing Agencies is moving forward with a review, for possible changes, of its existing recommended practices for state housing credit agencies for low-income housing tax credit underwriting and allocations.

Initiated earlier this year, the review is being carried out by NCSHA’s Housing Credit Task Force, which discussed the project again at the organization’s recent housing credit conference in Chicago.

NCSHA’s recommended practices, last revised in late 2003, are voluntary standards that state HCAs are urged to incorporate in their standards and procedures for underwriting proposed projects seeking housing credits, and in deciding how much credit to award. These so-called “best practices” include recommendations in 17 areas, relating to such as debt coverage requirements, operating expenses, operating reserves, per unit cost limits for projects, limits on various fees, and market analysis.

According to NCSHA official Garth Rieman, NCSHA has already surveyed state housing finance agencies for their comments on the existing recommended standards for the current project. There is a plan to seek input shortly from other housing credit industry participants as well.

Rieman anticipated that there will be some minor changes made to the existing standards, and perhaps some additional recommendations. He said the presentation of recommended changes by the task force to NCSHA’s board of directors could possibly occur this December.

(For background article on current standards, go to http://www.housingonline.com/Documents/ncsha standards.pdf)