American Recovery and Reinvestment Act of 2009

The American Recovery and Reinvestment Act of 2009 (ARRA) was signed into law on February 17, 2009. The Act contains a number of funding mechanisms targeted at stimulating economic activity throughout the country in a broad array of categories. Within the Act, there are two provisions directly targeted to the low income housing tax credit industry, including:

• An allocation of additional “Home-Like” funds designed to provide tax credit developments with gap financing; and,
• An exchange provision that allows housing credit agencies to monetize housing tax credits for up to 85% of the 10 year credit amount.

As the state's housing credit agency, the Colorado Housing and Finance Authority (CHFA) will oversee the administration of the above-referenced programs and will have direct reporting requirements to state and federal governmental agencies. The housing tax credit resources are designed to stimulate the construction and rehabilitation of multi-family affordable rental developments that have been negatively impacted by the national economy and reduced investor demand for the low income housing tax credit. CHFA's primary goal in administering any of the federal funds received as part of the American Recovery and Reinvestment Act (ARRA) is to deploy the resources consistent with the spirit and intent of Congress.

Attached is a brief summary of the two provisions that relate to the LIHTC program: the Tax Credit Assistance Program (TCAP) and the Tax Credit Exchange Program.

CHFA's Tax Credit Allocation Staff is continuing to review the provisions contained in the legislation and working to establish procedures for applications and criteria for selection of awardees, while awaiting expected guidance from the departments of HUD and Treasury.

In near future we will be seeking input from the public, the Tax Credit Advisory Group and other industry partners so that we have the best information available to make decisions. CHFA has already taken steps to identify the pool of eligible applicants and the potential gaps in financing they may be facing.

CHFA's primary goal in administering any of the federal funds is to deploy these resources consistent with the spirit and intent of Congress. In our view that means deploying the money into the system as quickly and efficiently as possible, while maintaining the same level of prudence and oversight required in awarding tax credits.

CHFA's top priority with the funds received from ARRA will be to assist those “shovel ready” projects that have already received a reservation of tax credits but have stalled due to the current economic conditions and/or the drop in equity pricing in the tax credit markets.

The LIHTC program has been successful because of its partnership between the public and private sectors. We intend to try and preserve that partnership wherever possible which means we will try to ensure that investors stay in the deal if possible.

We will continue to keep you informed via the eNews as guidance is received from the federal agencies and as we move forward with our policies and procedures for requesting funds.

For additional information, please contact Tasha Weaver at 303.297.7429 or tweaver@chfainfo.com.

Additional ARRA Resources:

American Recovery and Reinvestment Act

ARRA LIHTC Provisions

HUD site for Tax Credit Assistance Program Funds