Tax Credit Assistance Program

The Tax Credit Assistance Program, also referred to as the Assistance Program, is one of two programs resulting from the American Recovery and Reinvestment Act of 2009 (ARRA) , which has been created to assist the Montana Board of Housing in its mission to provide rental housing for low to moderate income Montanans across the entire state.

The Assistance Program funding allows MBOH to receive $7,818,360 from the federal government, in this case the U.S. Department of Housing and Urban Development, to assist the owners and developers who are having a hard time financing and building its Low Income Housing Tax Credits projects all across the state. The other program is the Tax Credit Exchange Program.

Affordable housing is in short supply in the Bitteroot Valley, as in many parts of Montana.

These programs and the much needed funding for housing, is dispersed in Montana via the Montana Reinvestment Act, HB 645. This money represents a life-saver for the housing projects currently in the pipeline that are using Low Income Housing Tax Credits. Due to the very tight credit conditions all over the world, investors of housing tax credits have become difficult to attract, especially for rural states like Montana.

The Tax Credit Assistance Program (TCAP) funds may be used for capital investment in eligible LIHTC projects. Capital investment means costs that are included in the ‘eligible basis’ of a project under Section 42 of the IRC. TCAP funds cannot be used for the administrative costs of TCAP grantees, including the cost of operating the program or monitoring compliance, and section 1604 of ARRA specifically prohibits the use of grant funds for swimming pools.

The TCAP assistance provided to a project must be made in the same manner and subject to the same limitations (including rent, income, use restrictions and compliance monitoring) as required by the state housing credit agency with respect to an award of LIHTC to any project.

The housing credit agencies in each State shall distribute these funds competitively and according to their qualified allocation plan (QAP).

Communities and individuals benefit directly when there is affordable housing available.

The Tax Credit Assistance Program is designed to immediately create new jobs and save jobs at risk of being lost due to the current economic crisis. The program establishes deadlines for the commitment and expenditure of grant funds and requires state housing credit agencies to give priority to projects that will be completed by February 16, 2012. Projects awarded low income housing tax credits in fiscal years 2007, 2008, or 2009 are eligible for funding, but housing credit agencies must give priority to projects that are expected to be completed by February 2012. Seventy-five percent of Tax Credit Assistance Program funds must be committed by February 2010, 75 percent must be expended by February 2011, and 100 percent of the funds must be expended by February 2012. Tax Credit Assistance Program funds not expended by that date will be recaptured by HUD.

Georgetown Lake The Low Income Housing Tax Credit program produces safe, sanitary, affordable housing for the hard-working people all across Montana.

Montana and Governor Schweitzer's overriding objective in support of these goals is the creation and preservation of jobs. The Montana Reinvestment Act funds support three themes that align with the broader goals of ARRA:

promoting energy efficiency and creating green jobs
unlocking the credit markets and supporting shovel-ready projects
mitigating the effects of the economic crisis and preventing community decline.

Once the funds are dispersed, MBOH will make regular reports of the following data to the state's recovery website at http://recovery.mt.gov/commerce/default.mcpx:
- Name of recipient entity
- Name of project
- Brief description of project
- Location of project: city/county, state, zip code
- Number of construction jobs created
- Number of construction jobs retained
- Number of non-construction jobs created
- Number of non-construction jobs retained
- Number of total housing units newly constructed
- Number of total housing units rehabilitated
- Number of low-income housing units newly constructed
- Number of low-income housing units rehabilitated

ARRA, which has appropriated $2.250 billion, will ultimately provide affordable housing to an estimated 35,000 households nationwide. The expected benefits of the Tax Credit Assistance Program are to increase quality & longevity of housing stock, produce tens of thousands of affordable housing units, and unlock private lending. Montana will make sure to use this opportunity to protect the shovel-ready housing projects from a quick doom and will meet the Montana Reinvestment Act's overriding goal of creating and preserving jobs. The specific benefit of the Tax Credit Assistance Program in Montana will be to provide affordable rental housing to low-income family and senior households in communities that desparately need help with their housing issues with the added benefit of creating new or preserving existing jobs.

There is a cronic housing shortage on Montana's seven Reservations. Serious overcrowding and families living in substandard conditions are a result.