Congress Passes Suspension of Some HUD Form 2530 Filings

At the end of May, both houses of Congress passed H.R. 1675 suspending "all filing requirements under the Previous Participation Certificate process with respect to limited liability corporate investors who own or expect to own an interest in entities which are allowed or are expected to be allowed low-income housing tax credits under section 42 of the Internal Revenue Code of 1986." If the President signs this bill into law as expected, what will that mean for our investor clients?

There are a few open questions still to be determined.

First, what qualifies as a "limited liability corporate investor?" We believe that most of our institutional clients invest in forms that would qualify under this term.

Second, HUD Form 2530 filings are required for housing projects which receive HUD assistance (such as Section 8 payments or FHA mortgage insurance) but did not receive an allocation of low-income housing tax credits. It would appear that such projects would still be subject to HUD Form 2530 filings.

Third, why did Congress exempt low-income housing tax credits and not other tax credit programs? For example, New Markets Tax Credits and Historic Rehabilitation Tax Credits might be paired with HUD subsidies or FHA mortgage insurance to subsidize a project, but those tax credit programs are not exempted from HUD Form 2530 filings. Will Congress consider expanding the exemption to cover other tax credit programs? Will HUD suspend Form 2530 filings entirely once this bill is signed into law?

If you are interested in learning how this law could affect your community development investment strategies, please contact Peter Duffley .