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The directory has been created for national banks interested in learning about possible financing and investment opportunities from various federal tax credit programs.
The directory provides easy access to information for a sampling of organizations that can provide resources to banks interested in investing and lending to federal tax credit projects. For each federal tax credit program, the resources in this directory have been organized into two broad categories:
- Government and Regulations
- Industry Organizations and Professional Associations
The intention of this guide is to provide national banks with general information about these tax credit programs. Banks should consult their own tax advisors about these tax treatments and the consequences that may apply to their own transactions.
Historic Tax Credit Program
The federal Historic Tax Credit (HTC) Program helps revitalize communities by encouraging the flow of private funds to facilitate the rehabilitation of historic buildings. Under the program, owners of historic properties partially finance the costs of rehabilitation and restoration of certified historic properties by "selling" the credits to third parties, which may include national banks. The National Park Service within the U.S. Department of the Interior and the U.S. Department of the Treasury jointly administer the Historic Tax Credit Program in partnership with State Historic Preservation Offices.
Government and Regulations
Office of the Comptroller of the Currency (OCC)
"Historic Tax Credits: Bringing New Life to Older Communities," Community Developments Insights, November 2008. This edition of Community Developments Insights describes how the Historic Tax Credit operates, outlines the risks and regulatory considerations of participation in the program, and discusses how the purchase of these credits by national banks may be considered under the Community Reinvestment Act (CRA).
"Historic Tax Credits," Community Developments Fact Sheet.
OCC Legal Authority - National Banks
12 USC 24(Eleventh) - National banks are given authority to make loans and investments to promote the public welfare. See the OCC Part 24 Community Development Investments Resource Web page. 12 USC 24(Seventh) - Depending on the specifics of the transaction, national banks may be authorized to finance an Historic Tax Credit project in such a manner as to make the bank eligible to receive the federal Historic Tax Credits by acquiring an interest in the entities that hold the properties for rehabilitation. The substance of the transaction must remain the provision of financing for the rehabilitation of the historic property. See the OCC Corporate Decision No. 99-07 (March 256, 1999).
Part 24 Community Development Investments Resource Web page. National banks may make investments primarily to promote the public welfare under the community development investment authority in 12 U.S.C. 24(Eleventh) and its implementing regulation, 12 CFR 24 (Part 24). Part 24 authorizes national banks to make loans and investments to promote the public welfare by benefiting primarily LMI individuals, LMI areas, or government-targeted redevelopment areas. National banks seeking to provide financing to HTC projects under Part 24 must either request prior OCC approval or submit an after-the-fact notice to the OCC, depending on the bank's safety and soundness profile, CRA performance, and the nature of the project financing.
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National Conference of State Historic Preservation Officers (NCSHPO) - The National Conference of State Historic Preservation Officers (NCSHPO) is the professional association of the State government officials who carry out the national historic preservation program as delegates of the Secretary of the Interior pursuant to the National Historic Preservation Act of 1966, as amended (NHPA) (16 USC 470). The NHPA provides for the designation of a State Historic Preservation Officer (SHPO) in each state.
U.S. Department of the Interior, National Park Service (NPS) - The National Park Service (NPS) administers the Historic Tax Credit program jointly with the Internal Revenue Service (IRS) and in partnership with State Historic Preservation Offices (SHPOs).
"About the Federal Tax Incentives for Historic Preservation," Historic Preservation Tax Incentives, Technical Preservation Services, National Park Service.
"Incentives!," A Guide to Federal Preservation Tax Incentives Program for Income-Producing Properties, National Park Service.
"IRS Connection," Historic Preservation Tax Incentives, Technical Preservation Services, National Park Service.
"Case Studies in Affordable Housing," Technical Preservation Services, National Park Service.
"Heritage Preservation Services," National Park Services.
HTC Tax Regulation 26 CFR 1.48-12.
U.S. Department of Treasury, Internal Revenue Service (IRS)
Internal Revenue Code Section 47 - Rehabilitation Credit (Historic Tax Credits).
Internal Revenue Service: Rehabilitation Tax Credit - Real Estate Tax Tips (Historic Tax Credits).
Housing and Economic and Recovery Act of 2008 (HERA) and the HTC Program - The Housing and Economic Recovery Act of 2008 (HERA), enacted on July 30, 2008, includes a provision that allows corporations to use historic tax credits to offset their AMT liabilities.
Industry Organizations and Professional Associations
National Housing & Rehabilitation Association (NH&RA) - The National Housing & Rehabilitation Association (NH&RA) is an association for professions in the historic rehabilitation, affordable housing, new markets, and renewable energy tax credit programs. In addition, the association produces two publications for organizations interested in financing tax credit projects.
National Housing Trust - The National Housing Trust is a national nonprofit organization engaged in housing preservation through real estate development, lending, and public policy initiatives.
National Trust Community Investment Corporation (NTCIC) - The National Trust Community Investment Corporation (NTCIC) makes equity investments in real estate projects that qualify for federal historic tax credits and other tax credit transactions.
National Trust For Historic Preservation - The National Trust for Historic Preservation is a private, nonprofit membership organization dedicated to saving historic places and revitalizing America's communities by providing industry leadership, education, advocacy, and resources.
Tax Credit Capital, LLC, Small Deal Fund (TCC) - TCC establishes Historic Tax Credit funds used primarily for midsize and smaller projects and provides services to developers of federal historic tax credit projects.
Low-Income Housing Tax Credit Program
The federal Low-Income Housing Tax Credit (LIHTC) Program was established by the Tax Reform Act of 1986 (Internal Revenue Code Section 42) to create market incentives for the acquisition and development or rehabilitation of affordable rental housing. The equity capital generated from the tax credits lowers the debt burden on LIHTC properties, making it easier for owners to offer lower, more affordable rents; while investors, such as banks, obtain a dollar-for-dollar reduction in their federal tax liability. Over the last two decades, this program has become an important tool for addressing the nation's affordable housing needs.
Government and Regulations
Office of the Comptroller of the Currency (OCC)
"Low-Income Housing Tax Credits: Affordable Housing Investment Opportunities for Banks," Community Development Insights, February 2008. This edition of Community Developments Insights describes how LIHTCs are used to develop affordable rental housing and how banks can benefit from investing in LIHTC-financed projects. It describes the two approaches for investing in LIHTCs: direct investments in individual affordable housing projects and fund investments that have multiple projects managed by third parties. The report outlines risks and regulatory considerations of LIHTC investments and describes how these investments would be considered under the Community Reinvestment Act (CRA).
"Low-Income Housing Tax Credits," Community Developments Fact Sheet.
"Low-Income Housing Tax Credit Funds: Investment Opportunities for Banks," OCC Web and Telephone Seminar, Executive Summary, September 10, 2008.
"Low-Income Housing Tax Credit Funds: Investment Opportunities for Banks," OCC Web and Telephone Seminar, Handout, September 10, 2008.
"Investing in Low-Income Housing Tax Credits: A Sound Opportunity for Community Banks," Community Developments Investments, Spring 2006.
Part 24 Community Development Investments Resource Web page. National banks may make investments primarily to promote the public welfare under the community development investment authority in 12 U.S.C. 24(Eleventh) and its implementing regulation, 12 CFR 24 (Part 24). This authority allows banks to make investments that primarily benefit low- and moderate-income individuals or low- and moderate-income areas. National banks seeking to provide financing to HTC projects under Part 24 must either request prior OCC approval or submit an after-the-fact notice to the OCC, depending on the bank's safety and soundness profile, CRA performance, and the nature of the project financing.
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U.S. Department of Housing and Urban Development (HUD)
"LIHTC Basics," Community Planning & Development, U.S. Department of Housing and Urban Development.
"Low-Income Housing Tax Credits," HUD User, U.S. Department of Housing and Urban Development.
"Low Income Housing Tax Credits," Community Planning & Development, U.S. Department of Housing and Urban Development.
Internal Revenue Service
Internal Revenue Code, Section 42 Low-Income Housing Credit.
"IRS Resources About Tax Exempt Bonds," Internal Revenue Service, U. S. Department of the Treasury.
Housing and Economic and Recovery Act of 2008 (HERA) and the LIHTC Program - Enacted on July 30, 2008, HERA, has several provisions pertaining to the LIHTC under Section 42 of the Internal Revenue Code of 1986. Some of the provisions of most interest to banks are: permits housing tax credits to offset AMT liabilities and increases liquidity of tax credit investments by eliminating recapture bond requirements.
Environmental Protection Agency (EPA)
"EPA Brownfields and Environmental Cleanup," Mid-Atlantic Bownfields & Land Revitilization, U. S. Environmental Protection. Brownfields developers can use LIHTCs to assist with financing for low-income housing projects.
Industry Organizations and Professional Associations
Affordable Housing Investors Council (AHIC) - AHIC provides information about the benefits of investing in affordable housing tax credit properties, educates corporate investors on all aspects of affordable housing, and discusses issues of importance to investors in the industry.
Enterprise Community Investment, Inc. - Enterprise Community Investment, Inc. provides LIHTC equity for affordable housing projects across the country.
National Association of Local Housing Finance Agencies (NALHFA) - NALHFA is a national association of professionals, including city and county agencies, non-profit organizations, underwriters, consultants, financial advisors, bond counsels, and rating agencies, who help finance affordable housing in the broader community development context at the local level.
National Association of State and Local Equity Funds (NASLEF) - NASLEF promotes the efficient management of state and local equity funds to create or rehabilitate affordable rental housing throughout the United States.
National Council of State Housing Agencies (NCSHA) - NCSHA was created by the nation's state Housing Finance Agencies (HFAs) as a nonprofit affordable housing advocacy organization that represents state HFAs, the District of Columbia, Puerto Rico and the Virgin Islands, two (non-HFA) state agencies that allocate LIHTCs, and for profit and nonprofit firms in the affordable housing field.
National Equity Fund (NEF) - NEF, an affiliate of the Local Initiatives Support Corporation (LISC), was created as LISC's tax-credit syndication arm in 1987 to help deliver additional capital to Community Development Corporations (CDCs) focused on affordable housing development.
National Housing & Rehabilitation Association (NH&RA) - The National Housing & Rehabilitation Association (NH&RA) is an association for professions in the historic rehabilitation, affordable housing, new markets, and renewable energy tax credit programs. In addition, the association produces two publications for organizations interested in financing tax credit projects.
New Markets Tax Credit Program
The New Markets Tax Credit (NMTC) Program seeks to leverage capital from investors to spur economic development in urban and rural low-income communities. Within the Treasury Department, the Community Development Financial Institutions Fund (CDFI Fund) and the Internal Revenue Service (through Section 45D of the Internal Revenue Code) jointly administer the program. The NMTC program has become an important tool for promoting economic development and community revitalization strategies in low-income markets.
Government and Regulations
Office of the Comptroller of the Currency (OCC)
"New Markets Tax Credits: Unlocking Investment Potential," Community Developments Insights Report, February 2007. This publication examines the primary risks, benefits, and regulatory considerations associated with New Market Tax Credits (NMTCs). The report also discusses the ways in which bank investors have structured and managed these credits effectively. Banks have been active participants in the NMTC program because of the ability to generate competitive economic returns, and the opportunities they present for positive CRA consideration.
"New Market Tax Credits," Community Developments Fact Sheet.
"CRA: Community Development Loans, Investments and Services," Community Developments Fact Sheet.
Part 24 Community Development Investments Resource Web page. National banks may make investments primarily to promote the public welfare under the community development investment authority in 12 U.S.C. 24(Eleventh) and its implementing regulation, 12 CFR 24 (Part 24). Part 24 authorizes national banks to make loans and investments to promote the public welfare by benefiting primarily LMI individuals, LMI areas, or government-targeted redevelopment areas. National banks seeking to provide financing to HTC projects under Part 24 must either request prior OCC approval or submit an after-the-fact notice to the OCC, depending on the bank's safety and soundness profile, CRA performance, and the nature of the project financing.
U.S. Department of Treasury and Internal Revenue Services
NMTC Tax Regulation 26 CFR 1.45D-1.
Community Development Financial Institutions (CDFI) Fund - The Treasury Department's CDFI Fund, established by the Riegle Community Development and Regulatory Improvement Act of 1994, expands the capacity of financial institutions to provide credit, capital, and financial services to underserved populations and communities in the United States. The CDFI Fund's New Markets Tax Credit (NMTC) Program provides tax credit allocations to community development entities (CDEs) to attract investments from banks and other private-sector entities. The NMTC Program is a tool used by the CDFI Fund to help promote economic revitalization and community development.
NMTC And The American Recovery And Reinvestment Act of 2009 (Recovery Act) - The Treasury Department's CDFI Fund is one way the Recovery Act supports new economic growth in urban, suburban, and rural communities across the nation. Listed below are changes from the Recovery Act that may be useful to banks and other entities financing NMTC projects in underserved communities.
New Markets Tax Credits (CDFI) is receiving additional NMTC allocations, of which an additional $1.5 billion will be allocated from the FY 2008 allocation round and an additional $1.5 billion will be allocated for the FY 2009 round. The additional $3 billion in allocation authority is beyond the $3.5 billion previously allocated for the NMTC for FY 2009. The CDFI Fund (under the Financial Assistance Awards component) and the Native American CDFI Assistance (NACA) Programs will receive an additional $90 million in FY 2009.
Industry Organizations and Professional Associations
CDFI Coalition - The CDFI Coalition represents community development financial institutions (CDFIs) nationwide. CDFIs often work in partnership with banks to develop innovative ways, including NMTCs, to deliver loans, investments, and financial services to distressed communities.
National Housing & Rehabilitation Association (NH&RA) - The National Housing & Rehabilitation Association (NH&RA) is an association for professions in the historic rehabilitation, affordable housing, new markets, and renewable energy tax credit programs. In addition, the association produces two publications for organizations interested in financing tax credit projects.
National Trust Community Investment Corporation (NTCIC) - The National Trust Community Investment Corporation (NTCIC) makes equity investments in real estate projects that qualify for federal historic tax credits and other tax credit transactions.
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