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Notice Listings on Tax Credits
Notice Section 1.9 Application Requirements Notice Section 1.14 Developer Fee Notice Section 1.15 Streamlined RAD Conversion for Small Public Housing Agencies Notice Section 1.12.D Financing Plan Notice Section 1.14.A Notice Section 1.14.B Notice Section 1.14.C Notice Section Notice Section 1.15.A Notice Section 1.15.B Notice Section 1.4.B.5 Low-Income Housing Tax Credits (LIHTCs), Historic Tax Credits (HTCs), and Opportunity Zones
Documents on Tax Credits

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Questions on Tax Credits

HUD 2530s for LIHTC Investors

Can you clarify who needs to provide HUD 2530s in regards to a low income housing tax credit investor?

The RAD applicant is responsible for providing all 2530/APPS submissions. Note that LIHTC investors may qualify for 'passive investor' status in APPS. See http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/mfh/apps/appsmfhm. Passive investors can make a limited submission in APPS.

Lender and Investor Concerns Regarding Foreclosure

How is RAD responding to concerns of commercial lenders and Low-Income Housing Tax Credit (LIHTC) investors with regard to foreclosure matters and continued rental assistance?

HUD has posted a standard rider to the public housing conversion RAD HAP contracts to address the concerns LIHTC investors have raised while also protecting the long term affordability of properties converting under RAD, and adhering to the statutory provisions for ownership and control. These riders document and set forth conditions for: providing notice to LIHTC investors; accepting the investor’s offer to cure on behalf of a defaulted owner; providing HUD consent to the transfer of the investor’s interest in the ownership; and pre-approving replacement of the general partner or managing member with the special limited partner or similar entity for a limited period of time in order to facilitate an acceptable permanent replacement. To access these riders, go to www.radresource.net > Contracts & Closing Documents. HUD is also in the process of drafting standard riders to the Use Agreement and the public housing conversion RAD HAP contracts to clarify that HUD will not assert an interest to prohibit a lender from foreclosing when there is cause, but that the Use Agreement -- which establishes affordability requirements -- survives foreclosure by its terms and that continuation of HAP assistance requires HUD consent. It is also HUD’s goal through these riders to provide for a limited continuation of HAP assistance if the lender or its designee comes into ownership of the project in accordance with its rights under the loan documents. When final, these riders will be published on the RAD website. Until these riders are finalized, HUD has developed several provisions that can be provided by the RAD Closing Coordinator to assist with transactions currently moving into the closing phase. These provisions address lender concerns while also protecting the long term affordability of properties converting under RAD, and adhering to the statutory provisions for ownership and control. Importantly, neither rider changes RAD statutory and RAD notice requirements around ownership and control. The RAD Use agreement and RAD HAP contract – two means through which long-term affordability for residents are secured – survive foreclosure, leaving current and future residents protected.

Subsidy Layering Review form

I'm working on a LIHTC transaction. The HFA has agreed to do the subsidy layering review. Is there a form that HUD would prefer the HFA use?

No. HUD does not have a subsidy layering form for external parties to use. The HFA should perform the subsidy layering review in accordance with their existing internal process.

LIHTC Guarantees

Can a Housing Authority provide the guarantees in a LIHTC deal.

The RAD program neither requires nor prohibits a PHA from providing these guarantees.

Next Steps for Project Not Awarded 9% Tax Credits

What are the specifics of HUD’s decision to issue a new Financing Plan due date if the project is not awarded credits in current round and needs more than 30 days to established a financing strategy that does not include 9% credits? Notice states that the decision is based on score and rank. What does "score and rank" refer to?

If the PHA’s applications for 9% tax credits is unsuccessful in the first tax credit round that begins 90 days after CHAP issuance, the CHAP will be terminated unless, within 30 days of notification, the PHA demonstrates that it diligently pursued 9% tax credits, as evidenced by the score and ranking in the unsuccessful 9% application OR proposes a financing strategy that does not rely on 9% tax credits and that is feasible. “Score and ranking” refers to the QAP score and rank within the LIHTC application round. Typically projects are rated and ranked based upon how well the project met the priorities and criteria set forth in the state’s QAP and the top scoring applicants are awarded LIHTCs. The PHA would need to submit evidence showing that their project received a high QAP score and ranking but still did not receive the credits due to the competiveness of the round.