New Tax Credit Proposal Aims at Affordable Housing Shortage

A new effort to encourage the development of affordable housing is being proposed via potential tax credit legislation. Sen. Ron Wyden (D-OR) has released draft legislation of the proposed Middle-Income Housing Tax Credit (MIHTC) of 2016. Inspired by the Low-Income Housing Tax Credit program, Wyden’s legislation would direct federal funds to state housing authorities that would, in turn, provide tax credits to developers for the creation or renovation of new affordable rental housing. The federal funds allocation would be determined based on the population of the recipient state—the proposed 2017 allocation would be $1 per capita, with smaller states receiving a minimum of $1.14 million—and the tax credits would be offered by states to developers for a 15-year period. The rent for eligible tenants cannot exceed 30 percent of the area median gross income (AMGI), and at least 60 percent of units must be set aside for residents with incomes between 60 percent and 100 percent of the local AMGI. Read more about this proposal at: http://nationalmortgageprofessional.com/news/60377/credit-proposal-aims-affordable-housing-shortage