Housing and Urban Development (HUD) officials said efforts to expand a Federal Housing Administration (FHA) pilot program will expedite the affordable housing tax credits funding process.
The Low-Income Housing Tax Credit (LIHTC) Program, which serves as the nation’s primary source of affordable housing production, was launched in 2012 to streamline FHA mortgage insurance applications for projects with equity from the sale of LIHTC. Specifically, it relates to applications to refinance mortgage debt under FHA’s Section 223(f) Program.
The endeavor has been expanded to include new construction and substantial rehabilitation under its Section 221(d)(4) and Section 220 Programs, per officials, ensuring faster and more efficient processing for low-risk, LIHTC transactions by eliminating redundant reviews.
“Today, we take another important step to stimulate capital investment in affordable housing at a time when we need affordable housing more than ever,” HUD Secretary Ben Carson said. “We’re also applying the lessons we’ve learned from our earlier pilot program to streamline our processing for new construction and substantial rehabilitation developments, so we can get these deals done quicker and more efficiently.”
HUD maintains the expanded pilot program also encourages long-term investments in low-income urban and rural communities while supporting development in Opportunity Zones — defined as census tracts in low-income communities experiencing economic distress.