Several changes are in store for the low-income housing tax credit (LIHTC) program in Washington next year, including increasing the general pool to 70 percent.
The general pool boost follows the expiration of a 20 percent set-aside that was created for HOPE VI projects in 2005. At that time, a 15 percent nonprofit set-aside and a 15 percent for-profit set-aside were temporarily suspended. Rather than reinstating the nonprofit and for-profit set-asides, Washington State Housing Finance Commission (WSHFC) officials have decided to fold the expiring HOPE VI set-aside into the general pool.
As a result, the breakdown in 2010 will be general pool, 70 percent; rural housing, 15 percent; qualified nonprofit, 10 percent; and rural development, 5 percent.
The move was part of a set of policy changes approved by the WSHFC last week.
WSHFC is also increasing the maximum allowed credit-per-unit limit by 10 percent for 2010 and 2011. The limit will be $15,885 per low-income housing unit. For qualified census tracts, difficult-to-develop areas, and projects eligible to receive a 130 percent eligible basis increase, the maximum is $20,610.
The boost comes at a time when equity prices have been falling, and more credits are needed to fill financing gaps.
WSHFC will also be expanding the authorized 130 percent basis boost designation. Under the set of proposed changes, all projects applying for credits in the 2010 and 2011 competitive tax credit rounds are eligible to receive the eligible basis increase. Approvals will be at the discretion of the commission.