The Oct. 13, 2005, Federal Register carries a final rule rewriting the Department of Housing and Urban Development (HUD) procedures that allow housing authorities to spend up to 20% of their Sec. 8 voucher funds on project-based subsidies. Generally, up to 25% of a building’s units can receive such assistance. Among several provisions, the new rule clarifies that units receiving “mortgage or production subsidies,” including low-income housing tax credits (LIHTCs), should not be left out of the total when the 25% is calculated.

In November, the Nixon Peabody law firm spotted a potentially expensive detail among the changes: The rules apparently override Public and Indian Housing (PIH) Notice 2002-22 to place a potentially lower rent cap on projects that receive both LIHTCs and Sec. 8 project-based voucher subsidy and are located in qualified census tracts (QCTs). See, in the Affordable Housing Law category of Firm Publications. Also posted there is an advisory about the Environmental Protection Agency’s Nov. 1 rule defining “all appropriate inquiries” that parties buying property must make in order to be protected against cleanup liability if a pollution problem surfaces later. See also bf/regneg.htm.

In the Nov. 29 Federal Register, HUD announced $203 million in Sec. 8 voucher program grants to assist tenants facing displacement or rent increases as a result of rehabilitation, demolition or loss of HUD housing stock.

CRA enforcement rules still aren’t settled

Enforcement standards for the Community Reinvestment Act (CRA) are still in flux despite the Aug. 2, 2005, and Aug. 18, 2004, publications of final rules on the subject by all four of the affected banking agencies. (See Affordable Housing Finance, September 2005, page 4.) The Nov. 10, 2005, Federal Register carries a notice and request for comment from three of the four agencies (the Federal Reserve Board, the Federal Deposit Insurance Corp. and the Comptroller of the Currency) describing proposed changes to a “Questions and Answers” document interpreting the new rules, with comments due Jan. 9, 2006. Much of the new material addresses the extent to which investments in disaster areas should count toward CRA compliance goals.>

Also in housing regulatory news

  • The Community Development Financial Institutions Fund has issued a new allocation agreement template for the New Markets Tax Credit. See nmtc/2005/2005AllocationAgreementTemplate.pdf.
  • The Congressional Hispanic Caucus is concerned about reports that HUD’s “Limited English Proficient” guidance document – still in drafting stages as of press time – may require landlords to translate documents themselves. The National Multi Housing Council (NMHC) has posted the caucus members’ letter at, which expresses concern about the burden on owners and landlords and the risk of confusion.
  • An Oct. 24, 2005, Federal Register announcement delayed the effective dates for the formulas at the heart of the Sept. 19, 2005, Public Housing Operating Fund final rule. Not all effective dates set by the regulation were put off, however, so do read carefully. PIH Notice 2005-34, posted Nov. 3, 2005, at, sets the exact timetable and promises training for housing authority staff in summer 2006.
  • The federal agencies’ semi-annual agendas, published in the Oct. 31, 2005, Federal Register, describe future rulemaking plans including guidance on “qualified active low-income community business” status under the New Markets Tax Credit; unspecified LIHTC changes, and rules on private-activity bond refunding. At HUD, planned rulemaking topics include electronic grant applications and the HOME, Sec. 8 and Mark-to-Market programs, but there's much more. If you read the agendas online at, note that some key rule-making plans from HUD and other agencies appear in the "Introduction" document under the heading, "Regulatory Information Service Center."