NAHMA LIHTC Update: IRS Provides Housing Credit Deadline Extensions

January 19, 2020

Dear NAHMA Members,

The Internal Revenue Service recently issued guidance to extend Housing Credit program deadlines and provide other leeway and flexibilities in response to the COVID-19 pandemic. Notice 2021-12 extends several deadlines that expired at the end of 2020, including:

Through September, 2021:

    • A moratorium on income recertifications and compliance monitoring inspections or reviews,
    • Closed common areas will not reduce eligible basis,
    • QAP hearings may take place by phone, and
    • A continuation of the flexibility allowing for the emergency housing of medical personnel and other essential workers.

Extensions until September 30, 2021, for:

    • The 10 percent test deadline,
    • The 24-month minimum rehabilitation expenditure period,
    • The 12-month transition period to meet set-asides for qualified residential rental projects, and
    • The 2-year rehabilitation expenditure period for bonds used to provide qualified residential rental projects.

Extensions until December 31, 2021, for:

    • The placed in service deadline, if the building was due to be placed in service in 2020,
    • The Reasonable Restoration Period in the case of a casualty loss not due to a pre-COVID-19-pandemic Major Disaster, and of section 8.02 of Rev. Proc. 2014-49 in the case of a casualty loss due to a pre COVID-19-pandemic Major Disaster, and
    • The correction period if a correction period that was set by the Agency ends on or after April 1, 2020, and before September 30, 2021.

For purposes of § 42(f), if the close of the first year of the credit period with respect to a building is on or after April 1, 2020, and on or before June 30, 2021, then the qualified basis for the building for the first year of the credit period is calculated by taking into account any increase in the number of low-income units by the close of the 6-month period following the close of that first year.

IRS Notice 2021-12 is attached and can also be found here.