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Extensions for LIHTC Program

AAFCPAs would like to make clients aware on January 15, 2021, the IRS issued Notice 2021-12, which further extends the temporary relief from certain requirements for low-income housing tax credit (LIHTC) projects. Temporary relief from certain requirements was originally extended earlier in 2020 under Notice 2020-53 due to the COVID-19 pandemic.

This notice also provides additional relief not previously addressed in Notice 2020-53. Some of the key highlights of the notice are below:

Relief for Deadlines

  1. 10% test for carryover allocations, extended to September 30, 2021
  2. 24-month minimum rehabilitation expenditure period, extended to September 30, 2021
  3. Placed in service deadline, extended to December 31, 2021
  4. Reasonable period for restoration or replacement in event of casualty loss, extended to December 31, 2021
  5. Occupancy obligations for 1st year credit considerations, extended to December 31, 2021
  6. Correction period, extended to December 31, 2021
  7. 12-month transition period for set aside testing purposes, extended to September 30, 2021
  8. 24-month rehabilitation period for bond projects, extended to September 30, 2021

Compliance Monitoring (April 1, 2020 – September 30, 2021)

  1. Income re-certifications
  2. Inspections and reviews

Common Areas and Amenities (April 1, 2020 – September 30, 2021)

Common areas or amenities that are temporarily unavailable or closed in response to COVID-19 and not related to other non-compliance will not result in reduction in eligible basis.

Guidance Permitting Agencies to Conduct Telephone Hearings (April 1, 2020 – September 30, 2021)

For purposes of an Agency’s Qualified Allocation Plan (QAP) meeting, if the hearing is conducted by teleconference that is accessible to residents, then the hearing does not fail to satisfy the requirements based solely that it was not held in person.

Emergency Housing for Medical Personnel and Other Essential Workers (April 1, 2020 – September 30, 2021)

If individuals are medical personnel or other essential workers that provide services during the COVID-19 pandemic, then, for purposes of providing emergency housing from April 1, 2020, to September 30, 2021, Agencies, Issuers, Owners, and Operators of LIHTC projects may treat these individuals as if they were Displaced Individuals.

As always, AAFCPAs will continue to monitor the status of the legislation, as well as communications from the IRS and the Treasury Department. We will keep you informed as changes occur or become clarified.

If you have any questions about how these provisions affect your organization, please contact Matthew McGinnis, CPA at mmcginnis@nullaafcpa.com, 774.512.4080; or your AAFCPAs Partner.

About the Author

Matt McGinnis
Matt has been serving AAF clients since 2006. Matt has extensive experience auditing and consulting with nonprofit organizations in accordance with Uniform Guidance/Single Audit and Government Auditing Standards, as well as those with Massachusetts Uniform Financial Statement filing requirements. Matt’s experience within the not for profit industry includes: affordable housing, community development, charter schools and human services organizations. Matt’s for-profit clients include both commercial and residential real estate projects. Matt specializes in various tax credit deals such as Low Income Housing Tax Credit (LIHTC) and New Markets Tax Credit (NMTC) programs.