Senators Reintroduce Bill to Fix 9% and 4% Housing Credit Rates

Senator Maria Cantwell (D-WA) and a group of bipartisan senators together reintroduced S. 1442, which would amend the Internal Revenue Code of 1986 to make permanent the minimum low-income housing tax credit (LIHTC) rate for unsubsidized buildings and provide a minimum 4 percent credit rate for existing buildings. In other words, the bill would permanently extend the flat 9 percent credit rate and create a flat 4 percent credit rate for LIHTC allocations.

Congress temporarily fixed the 9 percent credit in the 2008 Housing and Economic Recovery Act by setting the annual rate on the 70 percent credit at a flat 9 percent, but this applied only to properties placed in service by the end of 2013. Congress then extended the fixed 9 percent rate for projects with allocations made before Jan. 1, 2014, in the American Taxpayer Relief Act (HR 8), which addressed the tax provisions of the “fiscal cliff.” If Congress doesn’t extend the fixed credit rate, the lower credit rates will apply to any credit allocation made after Jan. 1, 2014, which could reduce the amount of equity that properties could receive by about 18 percent.

The Senate version currently has 20 co-sponsors from both sides of the aisle. The group consists of Richard Blumenthal (D-CT), Barbara Boxer (D-CA), Sherrod Brown (D-VT), Ben Cardin (D-MA), Susan Collins (R-ME), Diane Feinstein (D-CA), Al Franken (D-MN), Kirsten Gillibrand (D-NY), Tom Harkin (D-IA), Mazie Hirono (D-HI), Angus King (I-ME), Amy Klobuchar (D-MN), Ed Markey (D-MA), Bob Menendez (D-NJ), Pat Roberts (R-KS), Chuck Schumer (D-NY), Bernard Sanders (I-VT), Brian Schatz (D-HI), Elizabeth Warren (D-MA), and Sheldon Whitehouse (D-RI).