Housing Assistance: An Inventory of Fiscal Year 2010 Programs, Tax Expenditures, and Other Activities

U.S. Government Accountability Office

Grants to States for Low-income Housing Projects in Lieu of Low-income Housing Credits Program (Section 1602 Program)

Administering Agency/Entity Department of the Treasury
Short Description Authorizes Treasury, under the American Recovery and Reinvestment Act of 2009, to make cash assistance available to state housing credit agencies for subaward to developers of qualified projects. The purpose of the cash assistance is to fill a gap in the developer’s costs for construction or acquisition and rehabilitation of rental housing for low-income families and individuals. Section 1602 funds are in “exchange” for 2009 Low-Income Housing Tax Credits. By receiving funds, the subawardees are electing to forego tax credits on a property.
Primary Purpose Emergency assistance to housing market or current homeowner
Type of Housing Supported Rental Housing
Type of Assistance Grant
Fiscal Year 2010 Obligations $3,083,000,000; designed to be used in lieu of tax credits, the Section 1602 Program allowed state Housing Finance Agencies (HFAs) to exchange a portion of their 2009 credit ceiling (up to 100 percent of 2008 unused LIHTC and credit returned during 2009 and 40 percent of their 2009 allocation) for grant funds from Treasury at the rate of 85 cents for every tax credit dollar, and then award proceeds to finance the construction or acquisition and rehabilitation of qualified low-income buildings.

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