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Summary of Federal and State Legislation That Will Significantly Impact VHDA or Our Programs

In February, President Obama signed into law the federal American Recovery and Reinvestment Act of 2009. Changes to the Low-Income Housing Tax Credit (LIHTC) and other affordable housing programs in the economic recovery legislation of almost 1,600 pages address the immediate crisis, as well as deeper problems that overwhelmed the equity market and undermined the efficient production and provision of affordable housing.

Below are highlights of both the federal and state legislation that will impact Virginians and the way VHDA does business.

Housing Credit provisions include:

  • $2.25 billion in HOME funds to be distributed according to the HOME program formula directly to state housing credit allocating agencies (such as VHDA) for filling equity gaps in developments awarded federal Low-Income Housing Tax Credits in federal fiscal years 2007, 2008 and 2009.
  • A federal LIHTC exchange provision allowing state housing credit allocating agencies to trade in up to 40 percent of their 2009 (per capita and pool) credit authority and up to 100 percent of any unused or returned 2008 credits for 85 cents on the dollar to fill funding gaps in otherwise “ready to go” developments.

Homebuyer Tax Credit legislation:

  • Increases the current first-time homebuyer credit from $7,500 to $8,000.
  • Extends its expiration date from July 1, 2009 to December 1, 2009.
  • Eliminates its repayment requirement.
  • Lifts the prohibition against combining it with single family tax exempt bonds. These provisions are effective for home purchases made after December 31, 2008.

Housing Spending legislation includes:

  • $4 billion for the public housing capital fund.
  • $2 billion for full-year payments to owners receiving Section 8 project-based rental assistance.
  • $2 billion for the Neighborhood Stabilization Program.
  • $1.5 billion for homeless prevention activities.
  • $1 billion for Community Development Block Grants.
  • $250 million for assisted housing energy retrofits.
  • $200 million for rural housing to support an additional $1 billion in Section 502 direct loans and $10.5 billion in Section 502 guaranteed loans.
  • $100 million for lead paint hazard control.
  • $5 billion for weatherization.

State Legislation passed by the 2009 General Assembly

  • SB 1171 and HB 2031 implement provisions in the 2008 federal housing legislation requiring the state licensing and registration of individuals who are loan originators.  The bill also includes requirements for education, testing, background checks and surety bonds for loan originators.
  • HB 1600 amends the state budget for FY2009-2010, and includes an appropriation of $250,000 to the Virginia DHCD for foreclosure counseling services. 

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