Affordable Credit Stalls
The expanded US affordable‑housing tax credit from the recent tax law hasn’t produced the expected construction boom — developers point to bureaucratic delays and implementation hurdles as the reason projects haven’t materialized. (bloomberg.com) (finance.yahoo.com) Reporting on March 31 says the pipeline uplift is stalled, leaving non‑profits and investors hunting alternate financing while credits are sorted. (bloomberg.com)
The One Big Beautiful Bill Act, signed July 4, 2025, permanently raises 9% LIHTC allocations by 12% starting Jan. 1, 2026 and reduces the private‑activity bond threshold for 4% credits from 50% to 25%. (housingfinance.com) The Treasury and IRS issued Revenue Procedure 2025‑32 and later corrected it, setting the 2026 9% LIHTC per‑capita multiplier at $3.416 and the small‑state minimum at $3,953,600. (novoco.com) Industry sources tell reporters the new law’s money exists on paper but deals are on hold because agency guidance, state rule changes and administrative mechanics have not been fully resolved, stalling the expected pipeline lift. (bloomberg.com) State housing finance agencies are rewriting Qualified Allocation Plans and application timetables to incorporate the 25% bond test and higher ceilings, with recent QAP updates from South Carolina and developer guidance from Missouri explicitly addressing the implementation changes. (schousing.sc.gov) (novoco.com) Syndicators and equity providers report tighter pricing and more projects chasing a constrained pool of tax‑credit equity, leaving some deals exposed to rising construction and insurance costs even after the statutory boost. (housingfinance.com) Advocates and researchers say development delays are already large in some places—Enterprise Community Partners found nearly 45,000 proposed affordable units stalled in California’s pipeline—and many nonprofits are seeking bridge loans or alternative gap financing while credits and state processes are sorted. (housingfinance.com) (bloomberg.com) Market participants expect much of the tangible impact to arrive later in 2026 as HFAs finalize QAPs and syndicators adjust underwriting; analysts at Berkadia predict a clearer uptick in activity during the second half of the year. (housingfinance.com)
