Affordable housing and community development finance can be dense, layered, complex topics to understand. In the latest episode of the Novogradac Tax Credit Tuesday podcast, Michael Novogradac, CPA , and Wayne Michael, CPA , Novogradac's senior director of education, discuss Novogradac's e-learning platform,' Novoco Training , which seeks to bridge…

The U.S. Department of Housing and Urban Development (HUD) released 2024 rent and income limits earlier this month'limits that determine renter eligibility for HUD-assisted programs and for properties financed by low-income housing tax credit (LIHTCs). The limits also determine the maximum rents that owners of LIHTC properties can charge tenants. I…

In the latest installment in Tax Credit Tuesday's recurring Renewable Energy Tax Credit Finance series, Michael Novogradac, CPA, is joined by Tony Grappone, CPA to discuss final regulations concerning the elective pay option for certain renewable energy investment tax credits. The Internal Revenue Service published the final regulations in the Marc…

Many in the affordable rental housing development community may think they know what is meant by the term "mixed income," but, in fact, the phrase has many different interpretations depending on person, jurisdiction, property type, ownership structure and more. In the latest installment in the Tax Credit Tuesday podcast's So You Want to Be a LIHTC …

In this episode of the Tax Credit Tuesday podcast, Michael Novogradac, CPA, and Brad Elphick, CPA, discuss four hot topics in the new markets tax credit (NMTC) community. First, they discuss upcoming qualified equity investment issuance and reporting deadlines for prior allocatees. Second, they talk about recommendations to combine the next two all…

The United States Tax Court ruled in a Feb. 20 decision that a taxpayer was correct to include bond issuance costs in eligible basis for a 4% low-income housing tax credit (LIHTC) property in New York City. That decision ran counter to more than two decades of practice that followed Internal Revenue Service (IRS) guidance from as far back as 2000 t…

In the latest installment in Tax Credit Tuesday's recurring Renewable Energy Tax Credit Finance series, Michael Novogradac, CPA, is joined by Tony Grappone, CPA, and Peter Lawrence to discuss four legislative and regulatory hot topics of concern for those in the renewable energy development community in early 2024. First, the trio discusses the Tax…

The fiscal year (FY) 2024 round of the Capital Magnet Fund (CMF) opened Feb. 15. Approximately $250 million in cash awards is available to Community Development Financial Institutions and qualified nonprofit housing groups to fund the development, renovation and preservation of affordable rental housing and homeownership. In this week's episode of …

Over the past 10 years, the number of state-level low-income housing tax credit (LIHTC) incentives has increased from 13 to 30 as more states recognize the value of a state LIHTC to help fill financing gaps for affordable multifamily rental housing. In this week's episode of Tax Credit Tuesday, Michael Novogradac, CPA, and Novogradac partner Aaron …

Affordable multifamily rental housing property developers and managers can apply now for roughly $2 billion in grants and direct-, below-market loans via the Green and Resilient Retrofit Program (GRRP). Introduced via the Inflation Reduction Act of 2022, GRRP is a federal program that provides green and clean-energy support to rental properties tha…

While the Housing Opportunities Through Modernization Act (HOTMA) was signed into law in 2016, most provisions of the legislation'which is intended to streamline administration and ease the burden of compliance for affordable rental housing, including that financed by low-income housing tax credit (LIHTC) equity'didn't take effect until Jan. 1. In …

Sensitivities around timing can lead to variances in the volume of low-income housing tax credits (LIHTCs) an owner or manager can claim in the first year a LIHTC property is placed in service. In this episode of Tax Credit Tuesday, Michael Novogradac, CPA , and Novogradac partner Dayle Dalling, CPA, discuss four paths to optimizing first-year LIHT…

Authorized under the Inflation Reduction Act of 2022, the ability to transfer renewable energy investment tax credits is increasing liquidity in the tax credit marketplace and is changing the way partnerships are structuring renewable energy transactions. Michael Novogradac, CPA, and Novogradac partner Tony Grappone, CPA, discuss 2023 Q4 expectatio…

The U.S. Department of Housing and Urban Development (HUD) published a notice in the Jan. 10 Federal Register establishing a 10% cap on income limit increases for housing fin ' 'anced by low-income housing tax credits (LIHTCs), private activity bonds (PABs) and various HUD programs, including Section 8. In this week's episode of the Novogradac Tax …

Affordable rental housing financed by low-income housing tax credit (LIHTC) equity can either be new construction or property that is acquired and rehabilitated. In this week's episode of Tax Credit Tuesday, Michael Novogradac, CPA, and Christina Apostolidis, CPA, discuss the acquisition-rehabilitation (acq-rehab) option as part of the ongoing "So …

Rental income, operating expenses and net operating income all set new records in 2022, according to data published in the Novogradac 2023 LIHTC Income and Operating Expenses Report, reflecting some of the economics of operating affordable housing properties in the shadow of the COVID-19 pandemic and related economic issues. In this week's Tax Cred…

There are many economic benefits generated by renewable energy facilities. Chief among them are tax credits, tax losses and distributable cash flow from operations and from sale or refinance. These benefits are shared between the investor and developer sponsor, typically outlined in a multi-year benefit schedule. However, there are other significan…

In October, the National Council of State Housing Agencies (NCSHA) released an updated edition of its Recommended Practices in Housing Credit Administration, a collection of standards that guides how states administer the low-income housing tax credit (LIHTC). In this week's episode of the Novogradac Tax Credit Tuesday podcast, Michael Novogradac, …

Recent legislative and market changes are influencing renewable energy tax credit structures. In this week's episode of the Novogradac Tax Credit Tuesday podcast, Michael Novogradac, CPA, and Tony Grappone, CPA, discuss which ownership structures are gaining popularity and how the major economic benefits generated by renewable energy facilities are…

The three agencies that oversee the Community Reinvestment Act (CRA)'designed to ensure banks invest in the low- and moderate-income areas where they receive deposits'released their final regulations Oct. 24, making the first substantial change to CRA regulations since 1995. In this week's Tax Credit Tuesday, Michael Novogradac, CPA, and Peter Lawr…

The Community Development Financial Institutions (CDFI) Fund last month released the application for the calendar year 2023 new markets tax credit (NMTC) allocation awards. In this week's episode of the Tax Credit Tuesday podcast, Michael Novogradac, CPA, and Novogradac partner Rebecca Darling, CPA, discuss the new application and what applications…

The U.S. Census Bureau released in September the American Community Survey data for 2022, which is the first step for the U.S. Department of Housing and Urban Development (HUD) to determine 2024 rent and income limits for low-income housing tax credit (LIHTC) properties. In this week's episode of the Tax Credit Tuesday podcast, Michael Novogradac, …

There are more than 3,000 public housing authorities (PHAs) in the United States and those PHAs oversee nearly 1 million public housing units while being involved in a variety of U.S. Department of Housing and Urban Development (HUD) programs, including housing choice vouchers. In this week's episode of the Novogradac Tax Credit Tuesday Podcast, Mi…

In this Renewable Energy Tax Credit Finance Series episode of the Novogradac Tax Credit Tuesday Podcast, Michael Novogradac, CPA, and Tony Grappone, CPA, discuss year-end financial reporting recommended practices for renewable energy tax credit-financed facilities. First, they discuss tax and financial reporting recommended practices, so sponsors a…

In this So You Want to Be a LIHTC Developer Series podcast episode, Michael Novogradac, CPA, and Stacey Stewart, CPA, discuss five key investor concerns that low-income housing tax credit developers should understand and know how to address. They discuss 1) estimating the timing of the projected tax benefits, which are namely tax credits and tax lo…

The Community Development Financial Institutions (CDFI) Fund announced calendar year 2022 (CY22) new markets tax credit (NMTC) allocation authority awards Sept. 22, marking the 19th round of such allocations and beginning speculation on when the next round's application season will begin. In this week's Tax Credit Tuesday podcast, Michael Novograda…

Every affordable housing developer needs financial forecast to anticipate expenses, cash flow and access to capital to build the property, including developments built using low-income housing tax credit (LIHTC) equity. In the latest installment of the Novogradac Tax Credit Tuesday podcast's recurring "So You Want to Be a LIHTC Developer" series, M…

This 800th episode of the Novogradac Tax Credit Tuesday podcast launches "Renewable Energy Tax Credit Finance Series," which will focus on renewable energy tax credit (RETC) financing updates and trends. In this episode, Michael Novogradac, CPA, and Tony Grappone, CPA, discuss various factors affecting RETC structuring trends, including the Inflati…

State tax credits are often the crucial tool to filling financial gaps for high-impact community development investments. This statement is no more true than in the arena of state historic tax credits (HTCs). Thirty-eight states have some version of a state-level HTC, a credit that's paired with the federal tax credit. In this episode of Tax Credit…

The Inflation Reduction Act of 2022 created two new ways to monetize renewable energy tax credits (RETCs): 1) transferability, the ability to transfer certain RETCs as if they were separate property, and 2) elective pay or direct pay, the ability for certain tax-exempt owners of renewable energy property to report certain RETCs on their tax returns…

Since its passage one year ago, the Inflation Reduction Act of 2022 has spurred hundreds of billions of dollars in domestic, utility scale clean energy investments. Three incentives'the HOMES Energy Rebate Program, the Internal Revenue Code Section 45L Energy Efficient Homes Credit and the solar investment tax credit (ITC)'provide options to develo…

Affordable housing professionals who use the 4% low-income housing tax credit to finance and build homes may be familiar with two key tests that are crucial to bond transactions: The 50% test and the 95-5 test. On this week's episode of Tax Credit Tuesday, Michael Novogradac, CPA, and Charlie Rhuda, CPA, unpack four essential pieces of information …

Rental property owners who receive assistance from the U.S. Department of Housing and Urban Development (HUD) through debt financing and/or tenant rent subsidies used to develop and preserve affordable housing are subject to several reporting and compliance requirements. On this week's episode of Tax Credit Tuesday, Michael Novogradac, CPA, and Sus…

While the supply of community development tax incentives is a multi-billion-dollar annual market for tax credits that include the low-income housing tax credit (LIHTC), new markets tax credit (NMTC), historic tax credit (HTC) and various clean/renewable energy tax credits (RETCs), the demand for such credits plays a major role in determining their …

Community development tax incentives create a multi-billion-dollar annual market for tax credits, including the low-income housing tax credit, new markets tax credit, historic tax credit and various clean energy tax credits. On this week's Tax Credit Tuesday, Michael Novogradac, CPA, is joined by Novogradac partners Tony Grappone, CPA; Dirk Wallace…

The U.S. Department of Housing and Urban Development (HUD) annually releases income limits to determine eligibility for low-income housing tax credit (LIHTC) properties. HUD also releases caps that determine the maximum annual income a family can have and still be eligible to occupy HUD-assisted and LIHTC-financed housing, as well as to determine t…

This summer marks five years since the effective launch of the opportunity zones (OZ) incentive. In this episode of Tax Credit Tuesday, Michael Novogradac, CPA, and guests John Sciarretti, CPA, and Jason Watkins, CPA, discuss OZ hot topics, such as the recently introduced Opportunity Zones Transparency, Extension and Improvement Act, which would cr…

One of the crucial steps to an affordable housing property receiving low-income housing tax credits (LIHTCs) is the placed-in-service application the developer files with the housing credit agency. That application sets up the property to receive its Internal Revenue Service (IRS) Forms 8609, which allocate the tax credits on a per-building basis. …

With market and economic conditions changing so rapidly, historic tax credit (HTC) developers, syndicators, investors and lenders are updating their financial models more frequently for their HTC projects. In this episode of Tax Credit Tuesday, Michael Novogradac, CPA, and guest Dave Graff, CPA, discuss specific development costs that they see chan…

Developers, investors, syndicators, property managers and more know there are plenty of upsides to partnering with nonprofit organizations to develop and manage low-income housing tax credit properties. In this week's episode of Tax Credit Tuesday, Michael Novogradac, CPA, and Lance Smith, CPA, discuss four key tax considerations for anyone conside…

Capitol Hill has seen a flurry of legislation introduced this year to strengthen, expand, extend or create tax incentives in affordable housing and community development. The low-income housing tax credit, historic tax credit, new markets tax credit, opportunity zones and more are just some of the incentives that could be affected by recently intro…

Building for-sale affordable housing in economically distressed areas is a challenge that many for-profit and nonprofit developers face and a key hurdle is gaining financial equity. One method is the use of new markets tax credits to finance such housing and in today's Tax Credit Tuesday, Michael Novogradac, CPA, and Novogradac partner George Barlo…

The U.S. Department of Housing and Urban Development (HUD) released 2023 income limits to determine eligibility for low-income housing tax-credit (LIHTC) properties and HUD-assisted programs last week. On this week's Tax Credit Tuesday, Michael Novogradac, CPA, and Thomas Stagg, CPA, discuss the income limits and the implications for operators of L…

Several upcoming deadlines and changes in low-income housing tax credit (LIHTC) property compliance have wide-ranging implications for developers, owners, investors, property managers and beyond. Michael Novogradac, CPA, and Stephanie Naquin, HCCP, COS, discuss four major issues on the horizon in 2023 in property compliance: the average income set-…

The Community Development Financial Institutions Fund incentivizes community development and economic growth through the new markets tax credit (NMTC). Small business loan funds are one way community development entities (CDEs) can invest in small businesses in amounts up to $4 million. In today's episode of Tax Credit Tuesday, Michael Novogradac, …

The Inflation Reduction Act of 2022 allows for the transferability of certain renewable energy tax credits, including the production tax credit (PTC) and the investment tax credit (ITC). As the renewable energy community awaits further guidance from the Internal Revenue Service, Michael Novogradac, CPA, and Josh Morris, CPA, discuss in this week's …

Federal law generally requires low-income housing tax credit (LIHTC) properties to remain rent restricted and only available to low-income tenants for a minimum of 30 years. This period of required affordability beyond Year 15 is called the extended-use period. Some states extend the affordability period even longer. As more LIHTC properties reach …

A growing number of real estate developers are choosing U.S. Department of Housing and Urban Development (HUD)-insured loans: Section 221(d)(4) and Section 223(f). Both programs allow real estate developers to borrow more money at lower interest rates and longer amortization terms, compared to most conventional loans. Michael Novogradac, CPA, and N…

The Financial Accounting Standards Board released Accounting Standards Update 2023-02, which expanded the ability to use the proportional amortization method of accounting to all tax credits. Michael Novogradac, CPA, and Novogradac partner Brad Elphick, CPA, discuss what the announcement means for multiple types of tax credit investments, including…

The Financial Accounting Standards Board (FASB) published Accounting Standards Update (ASU) 2023-02 on March 29, which expands the proportional amortization method to account for investments in all tax credit structures. That accounting method was previously allowed only for low-income housing tax credit (LIHTC) investments, but now is available, b…