National Council of State Housing Agencies (NCSHA) has sent a letter to Congressional Leaders seeking provisions to strengthen the Housing Bond and Credit programs. The letter seeks the following:
- Extend, through 2012, the term during which states may use the additional $11 billion in Housing Bond authority HERA provided to stimulate the housing market and support the recovery. States have been largely unable to utilize this three-year (available in 2008-2010) authority in 2008 and 2009 due to the Housing Bond market freeze.
- Extend the two-year (2008 and 2009) 10 percent Housing Credit cap increase HERA provided. Increased Housing Credit cap is still needed since the flexibility HERA provided states to allocate more Credit to certain hard-to-achieve developments results in an overall reduction in annual Housing Credit production.
- Extend the Housing Credit Exchange Program created by ARRA. This extension is necessary to ensure Housing Credit production while the market continues to struggle to come back. Industry experts agree total Credit investment is not likely to increase significantly in 2010.
- Allow the exchange of GO Zone and Midwestern Disaster Area Credits in the existing Exchange Program and any extension of it. Developments financed with Disaster Credits as part of affected states’ relief efforts are facing the same difficulties moving forward as other Credit-financed developments, and they deserve the same assistance under the Exchange Program.
- Authorize the exchange of 4 percent Credits in any extension of the Exchange Program. A significant amount of affordable housing production is at risk if states cannot exchange 4 percent Credits for grants under the Exchange Program.
- Incentivize increased Credit investment, including through a five-year Credit carry-back and tax code changes that allow individual investors to take advantage of the Credit. Steps must be taken to bring additional capital into the Credit investment market to secure equity for much-needed affordable housing development.