Sens. Patrick Leahy (D-Vt.), Susan Collins (R-Maine), and others have introduced legislation to improve the use of Coronavirus State and Local Fiscal Recovery Funds with the low-income housing tax credit (LIHTC) program.
Across the country, $8 billion in the recovery funds have been earmarked for housing. However, these funds are not very compatible with the housing credit program.
Due to the structure of the LIHTC program, federal grants used to fill funding gaps in developments are usually provided as long-term loans. The new recovery funds must by obligated by 2024 and spent by 2026 so they cannot be loaned, according to the lawmakers.
The LIFELINE (LIHTC Financing Enabling Long-Term Investment in Neighborhood Excellence) Act seeks to allow states and localities to loan the recovery funds to LIHTC projects.
“Congress created State and Local Fiscal Recovery Funds to address the most pressing issues that we felt during the COVID-19 pandemic,” said Leahy in a statement, “In Vermont, and across the country, the pandemic has worsened the existing affordable housing crisis. We must act as soon as possible to make sure that these funds can be used with the country’s largest affordable housing program. In Vermont alone, hundreds of affordable housing units are on the line.”
The LIFELINE Act (S. 4181) was drafted in consultation with the Treasury Department, the authorizing committees for the State and Local Fiscal Recovery Fund, and housing and tax credit stakeholders. A companion bill (H.R. 7078) was introduced in the House of Representatives in March.
Ninety-seven local, state, and national organizations have endorsed the LIFELINE Act.
