Last month, President Obama signed a $1.8 trillion tax and spending bill that will carry the federal government through September 30th, 2016.
The 2,000 page bill — which includes $622 billion in tax breaks — is full of victories for affordable housing according to the National Association of Home Builders (NAHB). Here are three ways the NAHB says the bill will benefit affordable housing:
1. Increases affordable housing spending on new construction
The bill adds $50 million to the annual budget for the Home Investment Partnerships Program (HOME), raising it to $950 million. HOME is a Department of Housing and Urban Development (HUD) program that increases affordable housing through site acquisition and improvement, individual financial assistance, building rehabilitation and Community Housing Development Organizations.
2. Guarantees minimum floor on federal housing credits
The bill makes permanent the nine percent minimum floor on federal housing credits for new construction and major rehabilitation projects. Over a 10-year period, below-market rate federal loans and subsidies to developers will yield a value equal to 70 percent of the qualified basis of the building (the units designated affordable housing). The NAHB calls this “a significant victory for affordable housing,” because it gives developers “much needed certainty when planning future projects.”
3. Boosts Project Based Section 8 funding
Project Based Section 8 assistance serves 1.2 million extremely low and very low-income families. This bill increases spending to $10.62 billion — almost 10 percent above the $9.73 billion spent in fiscal year 2015. Although this money will not be used for new contracts, funding can be used to renew Section 8 Housing Assistance Payments for units/developments already associated with the program.