Low Income Housing Tax Credits & Preservation in Vermont, 2016

Vermont’s 2016 Qualified Allocation Plan gives top-tier priority to any project that provides rehabilitation. Additionally, Vermont requires perpetual affordability covenants for all 9% credit projects.

Vermont’s 2016 QAP defines preservation as any development currently occupied by low income households that faces, within the next five years: 1) a loss of deep rental assistance or other operating subsidy; and 2) faces prepayment of its mortgage or other action by its owner that would terminate federal low income use restrictions. In addition, any project(s) that is slated to receive federal funding specifically for the preservation of the units as affordable housing.

Priorities/Preferences:

Vermont’s 2016 QAP gives top-tier priority to any project that provides rehabilitation, including lead-based paint abatement, accessibility modification, and energy efficiency.  Additionally, Vermont requires preference be given for the acquisition and rehabilitation of existing projects that are federally subsidized and at-risk.

Thresholds:

All rehabilitation developments must plan on performing a substantial rehabilitation such that all of the long-term capital needs that have been identified in the Capital Needs Assessment will be addressed. In most cases this amount of rehabilitation will exceed the minimum required by the Code, which is $6,000 per unit or 20 percent of the adjusted basis of the building (or such amount as may be adjusted from time to time and published by the (IRS).

Extended Use:

For projects receiving 9% (ceiling/allocated) credits, State affordable housing credits, or State housing trust funds, the extended use period is perpetual. A guiding principle of the State’s Consolidated Plan for the use of federal funds is achieving the perpetual affordability of housing resources and investments.

Contributed By: 
National Housing Trust

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