The ACTION Campaign (ACTION) is pleased to release new fact sheets that demonstrate the impact of Housing Bonds and the 4 percent Housing Credit, as well as the projected additional affordable homes from establishing a minimum 4 percent Housing Credit rate at the national scale and for the top 12 states that would benefit.
Housing Bonds, together with the 4 percent Housing Credit, are one of the primary tools for preserving our nation’s existing affordable housing stock. Housing Bonds have been used with the Housing Credit to finance 1.1 million affordable homes nationwide. The Affordable Housing Credit Improvement Act (S. 1703 and H.R. 3077) would establish a minimum 4 percent Housing Credit rate, which would result in an estimated 66,000 additional affordable homes over the next ten years.
About Housing Bonds and the 4% Housing Credit
Multifamily Housing Bonds (Housing Bonds) are a type of tax-exempt private activity bond used by state and local housing finance agencies—often in conjunction with the Low-Income Housing Tax Credit (Housing Credit)—to acquire, construct, and rehabilitate affordable multifamily housing for low-income renters.
Housing Bonds provide financing to roughly half of all developments financed each year with the Housing Credit, our nation’s primary tool for building and preserving affordable housing. There are two components of the Housing Credit program – the “9 percent Housing Credit” and the “4 percent Housing Credit.” The 4 percent Housing Credit can only be accessed when Housing Bonds are used to finance at least half of a development’s cost. While Housing Bonds and the 4 percent Housing Credit can be used for either new construction or rehabilitation, they are commonly used for rehabilitation because it is often more cost effective to preserve existing affordable housing with this tool.
New ACTION Fact Sheets on Housing Bonds and the 4% Housing Credit
ACTION’s new National Fact Sheet on Housing Bonds and the 4 percent Housing Credit shows that 1.1 million affordable homes nationwide have been financed using a combination of Housing Bonds and the Housing Credit, serving an estimated 2.6 million low-income households. These Housing Bond-financed affordable homes have also supported an estimated 1.2 million jobs and generated approximately $46.6 billion in tax revenue and $118 billion in wages and business income.
Without Housing Bonds, the 4 percent Housing Credit would not finance tens of thousands of affordable rental homes each year. However, setting a minimum 4 percent Housing Credit rate would allow even more affordable rental housing to be built. Currently, the 4 percent Housing Credit rate is much lower than Congress originally intended because it fluctuates monthly based on a formula tied to federal borrowing rates. The Affordable Housing Credit Improvement Act (S. 1703 and H.R. 3077) would establish a minimum 4 percent Housing Credit rate, which would result in an estimated 66,000 additional affordable homes nationwide over the next ten years.
Top 12 States that would benefit from a Minimum 4 percent Housing Credit rate:
For more information on these projections, please see Novogradac’s blog post.
JOIN THE ACTION SIGN-ON LETTER!
On June 4, the bipartisan Affordable Housing Credit Improvement Act (S. 1703 and H.R. 3077) was reintroduced in both the Senate and the House! The Affordable Housing Credit Improvement Act (AHCIA) would establish a minimum 4 percent Housing Credit rate. The AHCIA would also increase the Housing Credit allocation authority by 50 percent, resulting in an estimated 384,500 additional affordable homes. Those two provisions alone – both included in the Senate and House versions of the AHCIA – would result in approximately 450,500 additional affordable homes over the next ten years.
The ACTION Campaign will be submitting a letter to Congress demonstrating our strong support for the Affordable Housing Credit Improvement Act. Read the letter and sign on to support the Affordable Housing Credit Improvement Act of 2019. The deadline for signing on to the letter is Tuesday, June 11.
All existing ACTION Campaign members will be included in the letter, so if you are already an ACTION Campaign member you do NOT need to sign on. However, we encourage you to share the letter with your networks to help us show broad support for the Housing Credit.
If you have any questions or wish to remove your organization from the letter, contact Sarah Brundage at email@example.com by the June 11 deadline.