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The Affordable Housing Tax Credit Coalition The Affordable Housing Tax Credit Coalition
  • ABOUT
    • About the AHTCC
    • AHTCC Leadership
    • AHTCC Members
    • Contact Us
  • HOUSING CREDIT
    • About the Housing Credit
    • How It Works
    • Impact
      • Native Americans
      • Veterans
    • Resident Stories
    • Finding Housing
  • ADVOCACY
    • Advocate Today
    • AHCIA of 2021
    • Regulatory Issues
    • AHTCC Priorities
  • GALLERY
  • EVENTS
  • AWARDS
    • Charles L. Edson Tax Credit Excellence Awards
    • Affordable Housing Champion Award
    • David Reznick Lifetime Achievement Award
  • NEWS
  • JOIN
Dec 03

IRS Releases Guidance on Minimum 4 Percent Housing Credit Rate

  • December 3, 2021
  • 2021 News, Housing Credit, Regulatory Issues

On December 1, the Internal Revenue Service (IRS) released guidance (see Revenue Ruling 2021-20 and Revenue Procedure 2021-43) to clarify the applicability of the minimum 4 percent Housing Credit rate. The rate was enacted at the end of 2020 for properties placed in service after December 31, 2020.

The new guidance states that the minimum rate is not available for:

  • Draw down bonds issued prior to 2021,
  • A “de minimis” obligation issued after December 31, 2020, or
  • A “de minimis” allocation of Housing Credits occurring after December 31, 2020.

The above restrictions clarify that the minimum 4 percent rate is not available for draw down bonds from prior to 2021. For any developments that received issuances of bonds in both 2020 and 2021, at least 10 percent of the development must be financed with new bonds in order for the 4 percent minimum rate to apply.

See additional analysis from the National Council of State Housing Agencies (NCSHA).

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The Affordable Housing Tax Credit Coalition is a trade organization of housing professionals who advocate in support of the Low-Income Housing Tax Credit

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