April 5, 2019

IRS Guidance Clarifies that Housing for Veterans and Special Populations is Eligible for Bond Financing

This week the Internal Revenue Service (IRS) issued guidance clarifying that housing for military veterans and households with special needs are eligible for bond financing. Rev. Proc. 2019-17 coordinates the general public use requirements for qualified residential rental projects financed with tax-exempt bonds with IRS provisions that govern the Low-Income Housing Tax Credit (Housing Credit). This eliminates prior concern that housing for veterans and other specified groups financed with multifamily Housing Bonds and the 4 percent Housing Credit would be in violation of the multifamily bond general public use rule. 

The guidance provides that a qualified residential rental project does not fail to meet the general public use requirements solely because of occupancy restrictions or preferences that favor tenants with special needs, who are members of a specific group under a Federal program or State program or policy that supports housing for such a specified group (such as military veterans), or who are involved in artistic or literary activities. 

This clarification strengthens the Housing Credit program’s ability to finance housing for people with special needs and military veterans. Many veterans have extremely low or no incomes, and it can be difficult to make properties for veterans financially feasible. According to the most recent Point-in-Time Count, more than 37,800 veterans were experiencing homelessness. Increasing the supply of affordable housing is essential to ensuring that more of our nation’s veterans return from military service to a stable home they can afford.  

Enterprise applauds the IRS for issuing this guidance, as well as the state and federal officials and advocates who helped advance this important clarification. 

For more information, please contact Sarah Brundage, Senior Director, Public Policy, at sbrundage@enterprisecommunity.org

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