1. The Ten Minute Guide to the 2008 Housing Act Forrest Milder fmilder@nixonpeabody.com 617-345-1055

2. © Forrest Milder, 2008 What are the Problems? Fewer Investors than in prior years Varying credit rates and price per credit make it difficult to assure that projects have enough cash Shortage of Projects Too many restrictions on financing

3. © Forrest Milder, 2008 The Solutions – 1. More Credits 10% more credits for two years $11B more bonds Can designate any building to be a 130% building Remember that these are available, not automatic $1.00m of credits x 95 ¢ = $950,000 $1.27m of credits x 75 ¢ = $952,500

4. © Forrest Milder, 2008 The Solutions – 2. Easier Computations Fixed 9% rate (for new construction and rehabs only) till 2013. What about lock-ins? Credits from tax exempt bonds still float Eliminate Alternative Minimum Tax Problem (remember that there are 10 years worth of LIHTCs)

5. © Forrest Milder, 2008 The Solutions – 3. Make it Easier to Roll Over Old Properties No recapture bonds makes it more likely that old projects will be transferred Significant loosening of the related party test for acquisition credits, from 10% to 50% 10 year last placed in service rule eliminated if the building is substantially financed, assisted, or operated under many federal and similar state programs There s still a 15-year rule for rolled-over LIHTC projects

6. © Forrest Milder, 2008 The Solutions – 4. Ease Financing Rules No more below market federal loans (but tax exempt bonds are still a problem) Grants that are turned into loans are okay Operating subsidies don t affect basis – but does this rule apply to existing projects?

7. © Forrest Milder, 2008 Miscellaneous Changes Special needs, federal or state program and artists and literary housing are all okay Bond and tax credit rules are conformed. Changes to computation of permitted rents -- e.g., new rural area median and hold harmless rules Recycling Bonds