Beginner's Guide to The Housing Credit

Beginner's Guide to The Housing Credit

by Mark Shelburne




This book is intended for professionals who are beginning the process of learning about the federal low-income housing tax credit ("Housing Credit," also known as LIHTCs). Even the most capable student cannot obtain a working knowledge by reading one, or even several publications on the subject. The rules and practices are too complex, particularly for compliance. But every journey starts somewhere, and this book will help with your first application/allocation/closing/property—whichever role brings you to this industry.

Product Details

ISBN-13: 9781627226189
Publisher: American Bar Association
Publication date: 06/07/2015
Pages: 64
Product dimensions: 5.80(w) x 8.80(h) x 0.20(d)

About the Author

Mark Shelburne, of Raleigh/Durham, NC. has served as Counsel & Policy Coordinator for the North Carolina Housing Finance Agency since 2001. Before coming to the Agency Mark learned the program, essentially from scratch, as the sole in-house attorney for an equity provider.

Table of Contents

Dedication iii

Ancknowledgments ix

About the Author xi

Chapter 1 Introduction 1

Reason for Reading 1

How to Use This Book 1

The Really Basic Sasics 2

Two Different Communities 3

Limitations and Disclaimers 3

Sidebar #1: Early History 5

Notes 7

Chapter 2 Method of Calculation 9

Overview 9

Eligible Basis in General 10

Commercial Space 11

Boost 11

Applicable Fraction 12

Qualified Basis 13

Tax Credit Percentage, 9 Percent 13

Tax Credit Percentage, 4 Percent 13

Tax Credit Percentage Compared 14

Allocating Agency Limitation 15

Ten Years 16

Why Annual? 16

Summary Matrix 17

Sidebar #2: Trade Industry Resources 18

Notes 19

Chapter 3 Entity Structure, Equity Investment, and Example Numbers 21

LLCs and Limited Partnerships 21

Why Use a Pass-Through? 22

Ownership Entity Roles 22

Negotiating the Partnership (Equity Price) 23

Hypothetical Example 24

Other Sources 25

Effect of Noncompliance 26

Bringing It All Together 27

Sidebar #3: Closing Checklist, Six Days Out 29

Notes 35

Chapter 4 QAPs, Applications, and Allocation Requirements 37

Amount Available (10 Years Again) 37

Qualified Allocation Plans 38

Submitting an Application 39

Award, Reservation, and Allocation 39

Cliff Tests 40

Extended Use Commitment 41

Cost Certification, Form 8609, and Adjusters 41

Sidebar #4: A Different Kind of Money 43

Notes 44

Chapter 5 Project Operations and Compliance 47

Need for Training 47

Income 47

Rent (Maximum Housing Expense) 48

Suitability 50

Special/Unique Topics 50

First Year, Qualified Occupancy, and Another Adjuster 51

Monitoring, Noncompliance, and Time Periods 52

When Is It Over? 53

Sidebar #5: Rent and Income Limits 54

Notes 56

Epilogue: The Program's Future-and Yours 59

Index 61

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