CAA: Benefits to the Affordable Housing Industry and Families Who Qualify for Rental Assistance
By Donna Lemons, CPA and Heather Ambrose
The $1.4 trillion Consolidated Appropriations Act (CAA) of 2021 signed into law on December 27, 2020, contains several provisions that benefit the affordable housing industry and families who qualify for rental assistance. Some of the most significant impacts are highlighted below.
A permanent minimum 4 percent Housing Credit rate for any building acquisition which receives an allocation of housing credits after December 31, 2020 and any building financed with private activity bonds placed in service and receiving an allocation of Low-Income Housing Tax Credit (LIHTC) after December 31, 2020.
Rental Assistance: The Act provides $25 billion in emergency rental assistance to states and local governments, Native American, Alaska Natives, and Native Hawaiians which will run through the Treasury Department for the fiscal year 2021.
- No less than 90 percent of the funds must be used for payment of rent, rental arrears, utilities and home energy costs, and/or arrears, and related housing expenses. Assistance is for up to 12 months with an additional 3 months if needed to avoid eviction and the funds are available.
- Up to 10 percent of the funds are available for housing stability services and case management. Households with income at no more than 80 percent of area median income are eligible. Priority is given to households not exceeding 50 percent of area median income and/or are unemployed for the 90-day period proceeding such date.
- Renters or landlords with tenant consent may apply for these funds according to processes stipulated in the bill, with funds paid to the landlord.
- The funds received should not duplicate any other Federally Funded rental assistance provided to the household.
- The Act extends the CDC eviction moratorium for another month until January 31, 2021.
Rural Development Programs: The impact of the bill on affordable housing and housing development and preservation includes provisions of $25,000,000 for direct and guaranteed loans from the rural housing insurance fund. The loans are allocated as follows:
$1,000,000 for direct loans; and
$24,000,000 for guaranteed loans
Under this Act, nonprofit organizations and public housing authorities are offered incentives for acquisition of Rural Housing Service (RHS) multifamily housing properties which include:
- Proceeds from their own contributions and provisions for grants;
- Favorable rates and terms for developer loans; and
- Reimbursement of organizational costs, an “Asset Management Fee,” of up to $7,500 per property.
Disaster LIHTC: The stimulus bill provides an additional $1.1 billion allocation of LIHTC for non-COVID-19 major disasters in 11 states and Puerto Rico.
If you have any questions about how these provisions may impact you, please do not hesitate to reach out to your BRC team member.
Donna L. Lemons Senior Accountant, CPA
NC License #43849