Low-Income Housing Tax Credits & Preservation in Pennsylvania, 2017

Pennsylvania’s 2017 Qualified Allocation Plan (QAP) reserves tax credits to a minimum of three preservation properties in in each Pool (Urban Pool, Suburban/Rural Pool, and Additional Tax Credits). 

Projects must demonstrate that tax credits are necessary to extend the long term affordability and habitability of the development, or that there is a likelihood of conversion to market rate housing. 

Points

Developments seeking consideration for the Preservation Preference must demonstrate the need for Tax Credits to extend the affordability period of the existing property to ensure the continued availability of long-term subsidy or to address immediate health and safety concerns of the development. Points will be awarded based upon the following factors: ability to convert to market, loss of long-term subsidy, need for immediate health and safety improvements, good faith compliance with original extended use commitments, financial impact of proposed improvements (including energy efficiency upgrades) and economic impact on the existing community. Additional consideration will be given for those developments which include municipal support articulated in a publicly approved community plan or in the form of significant funding commitments, or evidence of substantial major investment in the area that is consistent with a comprehensive plan for neighborhood improvement which may include contributing to a transit oriented design initiative. Up to 20 points may be awarded in this category as follows: 

  • Significant Funding Commitments and Coordination with Other Housing and Community and Economic Development Programs – The Agency may award up to three (3) points to proposals that demonstrate further coordination between other housing and community and economic development programs stated above and evidence of significant funding commitments as part of the major investment in the area. 
  • Risk of Loss Due to Market Conversion or Sale – The Agency may award up to four (4) points to developments which are at risk of conversion to market rate housing. To be eligible for consideration, applications must include evidence that Section 8 project based or similar affordability restrictions expire within twelve (12) months from the date of application. Additionally, evidence of sustained occupancy greater than ninety percent (90%) over the last five (5) years must be provided. 
  • Risk of Loss Due to Critical Physical Needs – The Agency may award up to four (4) points to developments which are beyond fifteen (15) years of initial loan closing and tax credit placed-in-service date and at least one major physical plant component must be replaced or repaired or there is evidence of the need for an immediate health or safety improvement. Applicants must demonstrate that there has been a good faith effort to keep the property up to Uniform Physical Condition Standards.
  • Mixed-Income Housing – The Agency may award up to two (2) points for developments which incorporate market rate units as part of the unit mix. In order to qualify for points, at a minimum fifteen percentage (15%) of the units shall be targeted as market rate units. 
  • Transit-Oriented Design – The Agency may award up to two (2) points to developments located within one-half mile of a completed or planned public transportation fixed route stop. 
  • Walkability – The Agency may award up to two (2) points for developments which have the following walk scores according to “www.walkscore.com” (for scattered site projects, a walk score will be obtained for each site and a weighted average based upon number of units at each site will be calculated): Urban Suburban/Rural Percentage Points Percentage Points ≥80 2 ≥70 2 ≥70-79 1 ≥50-69 1 
  • Site – The Agency may award up to three (3) points to developments based upon site suitability for the proposed use. Site suitability will be based on the following features,: unit size mix, including number of efficiency units; neighborhood amenities; access to site; appropriateness of site for targeted tenant population; availability of sufficient parking; location relative to flood plain; neighborhood nuisances; condition of neighborhood; building on agricultural land; if scattered site, overall impact on the neighborhood; completed project’s improvement to or impact on the neighborhood.

Extended Use

Applications for 2017/2018 Tax Credits must demonstrate a commitment to serve low income residents for a period of not less than 35 years or, in the alternative, offer homeownership opportunities to qualified residents after the initial 15 year compliance period. For the commitment to serve low income residents for a period of not less than 35 years, Applicant will certify this commitment in the Application and the Restrictive Covenant Agreement will contain a provision waiving any right to petition the Agency to terminate the extended use term (as described in the Code).

Contributed By: 
National Housing Trust

Other Items of Interest