PROMOTING PRESERVATION AT YEAR 15 IN THE HOUSING CREDIT PROGRAM

National Housing Trust (NHT) has championed the preservation of existing affordable housing through the Low Income Housing Tax Credit (Housing Credit) program for almost 40 years. In addition to promoting tools that proactively create long-term affordable housing options, NHT continues to partner with state and local Housing Finance Agencies (HFAs) to protect properties against two threats to preservation at Year 15 – the Qualified Contract (QC) and the ambiguity of the nonprofit Right of First Refusal (ROFR).

Qualified Contracts

With an estimated 10,000 units of affordable housing lost annually as a result of the QC provision in the Housing Credit program, NHT and other advocates continue to urge Congress to close this loophole at the federal level. At the same time, we continue to work with state and local HFAs to take action to stop the continued loss of affordable housing in their state.

A recent analysis conducted by NHT identified that at least 39 HFAs require an owner receiving Housing Credits to waive their right to a QC, effectively eliminating this option for Housing Credit properties receiving a new allocation. An additional nine allocating agencies incentivize such a waiver by making it more likely that an applicant will receive competitive Housing Credits if they agree to waive their right to a QC.  

Learn more about Qualified Contracts, and our work to close the loophole, in our NHT Update here.

Nonprofit ROFR

In 2021, NHT started convening the HFA ROFR Working Group, bringing together over 15 state and local HFAs and allocating agencies dedicated to tackling the threats to the nonprofit ROFR at Year 15. Together, we developed an HFA ROFR Toolkit that provides seven distinct solutions that HFAs can and should implement to protect the nonprofit ROFR.

Click here to receive a copy of our HFA ROFR Toolkit.

As a direct result of NHT’s leadership, at least 32 HFAs have implemented policies and/or updated existing language based on recommended language in NHT’s ROFR Toolkit that strengthens the ROFR and protects the long-term affordability of these properties.

Learn more about the nonprofit ROFR and NHT’s HFA ROFR Toolkit in our NHT Update here.

NHT continues our work with stakeholders across the affordable housing community including renters, advocates, lenders, developers, HFAs and other program partners to protect, improve, and preserve Housing Credit properties. NHT recognizes the value of partnerships with HFAs to better serve the needs of affordable housing residents and support quality housing opportunities in communities around the country. 

To do this, we lead multiple approaches across the country, including: 

Engaging in Policy Change at the Federal, State and Local Levels
Building Capacity Among HFAs to Support Preservation and Long-Term Affordability
Sharing Qualified Allocation Plan Policy and Regulatory Solutions

To learn more about solutions to promote preservation and long-term affordability in the Housing Credit program, reach out to Laura Abernathy or Moha Thakur.