Sens. Patrick Leahy (D-VT) and Susan Collins (R-ME) have introduced the Senate version of the LIFELINE Act (the LIHTC Financing Enabling Long-term Investment in Neighborhood Excellence Act), which would allow Coronavirus State and Local Fiscal Recovery Funds (SLFRF) to be used to make long-term loans to Low Income Housing Tax Credit (LIHTC) developments. The House released its own version of this bill, H.R. 7078, in March, with Reps. Alma Adams (D-NC) and David Rouzer (R-NC) as lead co-sponsors.
Several provisions in the Senate bill are not in the House bill. Specifically, the Senate bill:
- Clarifies that only LIHTC properties that will place in service after the date of enactment of the bill are eligible for an SLFRF loan;
- Requires project sponsors to waive the right to request a qualified contract as a condition of receiving an SLFRF loan;
- Requires project sponsors to agree to repay SLFRF loaned funds to the entity that originated the loan if a project becomes non- compliant to the extent that it ceases to qualify as low-income housing/fails to comply with the extended use commitment; and
- Requires the Treasury Department to provide annual reports to several congressional committees on SLFRF obligations to LIHTC projects and on the status of any repayments on the SLFRF loans.
In a recent Advocate article, PHADA wrote about difficulties in using SLFRF in conjunction with LIHTC. Technical factors essentially prevent funds from being used for long-term loans needed for gap financing in LIHTC developments. Affordable housing stakeholders, including PHADA, sent a letter to Congress asking for a fix. The Treasury Department is now encouraging states and localities to use these funds for affordable housing development.
PHADA urges members to advocate to your Representatives and Senators to support this bill, which will ultimately allow for the development of more affordable housing.