Low Income Housing Tax Credit Program

Low Income Housing Tax Credit Program
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Overview

The federal Low Income Housing Tax Credit ("LIHTC") Program is frequently used in conjunction with New York State Housing Finance Agency ("HFA") financing. HFA is one of three sub-allocating agencies in the State of New York. As such, HFA allocates Cap Credits from the State Annual Allocation Cap, and "as of right" credits generated through the use of proceeds of federally tax exempt private activity bonds issued by HFA to finance qualified residential rental projects. The LIHTC application for projects financed by HFA is included in the overall Multifamily Financing Applications.

HFA also allocates "As of Right" credits to projects financed by Private Activity Bonds issued by other State agencies such as Industrial Development Agencies and Public Housing Authorities and maintains a separate application process for projects which only require the allocation of 4%, "As of Right" LIHTC.

Projects that obtain financing from other sources may receive allocations of Cap Credits from the State Annual Allocation Cap from the primary New York State LIHTC allocating agency, the New York State Division of Housing and Community Renewal ("DHCR"), or from one of the other sub-allocating agencies, the New York City Department of Housing Preservation and Development and the Development Authority of the North Country.

HFA has its own Qualified Allocation Plan ("QAP") which governs the allocation or allowance by HFA of Cap Credits, as well as the allocation of "as of right" credits, under Section 42 of the Internal Revenue Code ("Code"). Cap Credits may only be used in conjunction with taxable bond financing or conventional financing. Projects that receive taxable bond financing from the Agency and that are eligible for Cap Credits subject to the State LIHTC Ceiling (the total amount of Cap Credits available in New York State) may receive such credits pursuant to HFA's QAP only if DHCR has authorized HFA to allocate Cap Credits for the project from the State Ceiling, and the project meets all criteria applicable under HFA's QAP. The QAP also governs HFA's LIHTC project monitoring program.

Read HFA's QAP

See a list of HFA's Tax Credit Allocations

Download Certified Cost Certification Forms

Qualified Allocation Plan (QAP)

The New York State Housing Finance Agency recently revised its Low Income Housing Tax Credit Qualified Allocation Plan.

QAP Revision History

Current QAP

HFA most recently amended its Qualified Allocation Plan ("QAP") to comply with provisions of the Housing and Economic Recovery Act ("HERA") of 2008 (P.L. 110-289), effective on July 7, 2010, and the American Recovery and Reinvestment Act ("ARRA") of 2009 (P.L. 111-5), and to update procedural references in the QAP. A Notice of Adoption regarding the changes in the QAP was published in the State Register on July 7, 2010. The following documents are available at the links below:

Prior Revision History

HFA last amended its Qualified Allocation Plan ("QAP") effective upon publication in the State Register on February 13, 2008 to permit applications to HFA for Low-Income Housing Tax Credits ("LIHTC") for projects financed by Private Activity Bonds issued by other agencies. Before such amendment was adopted, HFA had typically allocated LIHTCs to projects for which it had providing financing. Under HFA's previous QAP, allocations and allowances of LIHTCs were made as part of its overall financing process for residential rental projects located in New York State. There was no LIHTC application procedure for projects that were not seeking other financing from HFA.

However, HFA anticipated that it will receive applications for LIHTCs from projects financed by tax-exempt bonds issued by entities other than HFA. The New York State Division of Housing and Community Renewal ("DHCR"), which previously allocated LIHTC to these projects, proposed a change in regulations that became effective on February 13, 2008, which effectively transfers to HFA the allocation and monitoring responsibilities related to LIHTC for projects financed by Private Activity Bonds.

QAP Revision Process

The QAP revision process is governed by the requirements of both §42 of the Internal Revenue Code and the State Administrative Procedures Act. Pursuant to both the Internal Revenue Code and SAPA, the agency provides opportunities to the public for comments during the revision process.

Copies of documents relating to prior revisions of the QAP are available below:

LIHC and SLIHC Cost Certification Forms

Mandatory Cost Certification Forms and Opinion Letters Required for Issuance of LIHC Forms 8609 and SLIHC DTF Form 625 for All Projects with “Costs as of” Dates on or after March 1, 2013.

HCR has adopted the Cost Certification Forms below to document the eligible and qualified basis for all HCR Tax Credit Programs. The appropriate forms and opinion letters must be used for “9%” LIHC and SLIHC processed at the Hampton Plaza office along with “As of Right” LIHC and SLIHC processed at the 641 Lexington Avenue office.

All of the Cost Certification Forms are Excel 93-2007 templates.  All worksheets are protected without any password.  If protection is removed from any sheet, additional rows or columns can be added to meet any project’s specific needs.  In the multiple Buildings templates, worksheets can also be copied where needed to add buildings.

The basic Excel template was modified into customized versions for different project types to make it easier for the CPA to complete by only including the schedules and information necessary for the type of project:

Stand alone LIHC/SLIHC projects 

HTF/HOME Funded Projects with or without LIHC/SLIHC

 

Opinion Letters are based on the National Council of State Housing Agencies Model Cost Certification Opinion Letter.  They are available for download below in Word 97-2003 format.

Cost Certification Opinion Letter for Private Activity Bond (4% or “As of Right”) Projects

Cost Certification Opinion Letter for Allocated Credit (9% ) Projects

Please contact Mark Flescher, (212)872-0493, email: [email protected] with any questions or for further information.

List of NYSHFA's Tax Credit Allocations

Stand-Alone As of Right LIHTCs

Allocation of As of Right LIHTC to Projects Financed by Bonds from an Issuer Other than NYSHFA

NYSHFA is authorized to allocate "as of right" credits to projects financed by Private Activity Bonds issued by other State agencies such as Industrial Development Agencies and Public Housing Authorities and maintains a separate application process for projects which only require the allocation of 4%, "As of Right" LIHTC. Such allocations are made in accordance with the Agency's QAP and any project receiving an allocation of LIHTC from the Agency will be subject to NYSHFA's LIHTC project monitoring program as described in the QAP.

Applications for "As of Right" LIHTC may be made throughout the year.

Pursuant to §2188.4(j)(3) and §2188.7(c)(3) of the QAP, NYSHFA may charge reasonable application, allocation and monitoring fees to projects which do not receive financing from the Agency and which receive LIHTC from NYSHFA. While it develops experience with the credit allocation process for projects that do not receive NYSHFA debt financing, the Agency plans to charge an application fee of $2,000, due at the time of application. A credit allocation fee of three percent (3%) of the first year credit allocation amount is due when a project requests the issuance of Form or Forms 8609 evidencing the final credit allocation. Not-for-profit applicants (or their wholly owned subsidiaries) which will be the sole general partner of the partnership/project owner or sole managing member of the limited liability company/project owner may request and be approved to defer payment of the application fee until the time of issuance of the final credit allocation. Annual monitoring fees will be set at one percent (1%) of the maximum restricted rents for the low income units with a minimum annual monitoring fee of $10,000.

These fees are subject to revision by the Agency without prior notice and will be adjusted, if necessary, to reflect the cost to the Agency of the application, allocation and monitoring processes.

Please contact Mark Flescher, (212) 872-0493, email: [email protected] for further information.

 

Applications Forms

Stand-Alone As of Right LIHTCs Application Forms