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Recent Guidance on the Recovery Acts Tax Credit Assistance Program and LIHTC Exchange Program

May 26, 2009

By MICHAEL D. HAUN & KEVIN YOUNG

On May 4, 2009, the Department of Housing and Urban Development (HUD) and the Treasury Department (Treasury) released separate guidance on two programs created by the American Recovery and Reinvestment Act of 2009 (the Recovery Act) related to the low-income housing tax credit (LIHTC) under Section 42 of the Internal Revenue Code (the Code).

HUDs guidance came in the form of CPD Notice 09-03 (the HUD Notice), which describes the implementation of the Tax Credit Assistance Program (TCAP). Under TCAP, HUD will award grants formulaically to the 52 state housing credit agencies that administer the LIHTC program (the 50 states, plus the District of Columbia and the Commonwealth of Puerto Rico) (State Housing Agencies) to facilitate the development of projects that received, or will receive, LIHTC awards under Section 42(h) during federal fiscal years 2007, 2008, or 2009 (Oct. 1, 2006 to Sept. 30, 2009). Such grants will be derived from the $2.25 billion allocated to HUDs HOME Program by the Recovery Act.