March 22, 2017
Yesterday, Representatives Pat Tiberi (R-OH) and Richard Neal (D-MA) introduced the Affordable Housing Credit Improvement Act of 2017 (AHCIA) to the House. This bill is the companion to the bill (S.548) introduced earlier this month in the Senate by Senator Maria Cantwell (D-WA) (which is itself a reintroduction of a bill of the same name proposed in 2016) and seeks to achieve the same stated end goal of strengthening the existing Low Income Housing Tax Credit program. The notable difference between the two bills is that the House version does not include the proposed 50 percent allocation increase found in the Senate's version.
One of the important features of the AHCIA, as proposed by Representatives Tiberi and Neal, is the establishment of a 4 percent Minimum Credit Rate for credits used to finance acquisitions in developments financed by housing bonds. The stated end goal is to increase both predictability and flexibility in housing credit financing, which in turn would allow developers to target units to very and extremely low-income households at affordable rents.
In addition, the bill states that the Minimum Credit Rate would have the potential to make more types of properties financially feasible for both developers and low-income households. The bill also seeks to support the preservation of existing affordable housing by enabling state housing financing agencies to restrict planned foreclosures when the purpose of the transaction is specifically to terminate a long-term rent agreement. It is hoped that this provision will protect low-income households in the long-term. In addition, the bill would allow income averaging so that the current 60 percent area median income (AMI) ceiling to qualify for Housing Credit would be averaged across occupied units.
The maximum income to qualify for a Housing Credit apartment would be set at 80 percent of AMI. This would permit households with incomes higher than 60 percent of AMI to offset the lower rents of households earning 30 or 40 percent AMI, thereby allowing developments to maintain financial feasibility while potentially increasing affordability.
Seeing as the Senate version of the AHCIA enjoyed strong support at its introduction from constituents across the country, it is not unreasonable to assume that the House AHCIA will see similar support in the coming days. The bill was introduced with 16 co-sponsors.
Please contact Linda Kirk or Steve Wallace with any questions.
Linda Kirk, Director
Stephen J Wallace, Counsel
Benjamin Price, Intern