Preserving Housing Credit Investment: The State of Housing Credit Properties and Lessons Learned for the Extended Use Period
When Low-Income Housing Tax Credit (Housing Credit) properties reach the end of their initial 15-year compliance period, how are they performing? What level of capital improvements do they need? How will they do in the years beyond the compliance period, the “extended use period,” which preserves rental affordability for at least an additional 15 years as required by current federal regulations? Can they access private capital for any needed recapitalization? In this paper, Enterprise Community Partners presents recent data that responds to these questions and shares how some state and local housing agencies around the country are addressing the post-Year 15 Housing Credit properties.
While the condition of the Housing Credit portfolio at Year 15 is strong, as properties age into a second 15-year period of rent restrictions and beyond, the ability for some of those properties to be able to afford to make improvements while maintaining affordability is clearly a challenge. Some of these local best practices point to solutions demonstrating programmatic and regulatory flexibility, new resources as well as resyndication where appropriate. These all set the stage for an ongoing dialogue of addressing what will be a growing challenge for the community development field.