The Internal Revenue Service has extended several COVID-19 relief policies, which expired at the end of 2020, and instituted new relief measures for the Low Income Housing Tax Credit (LIHTC) program sought by housing advocates.

According to an analysis by the National Council of State Housing Agencies, the IRS’s Notice 2021-22:

• Extends the deadline to meet the carryover allocation 10 percent test to the earlier of one year from the original due date or September 30, 2021;
• Extends the 24-month minimum rehabilitation expenditure period to the earlier of one year from the original end date or September 30, 2021;
• Extends the placed in service deadline for buildings with original deadlines of December 31, 2020, to December 31, 2021;
• Extends the reasonable period for property restoration or replacement in the event of casualty loss to the earlier of one year from the original end date or December 31, 2021 (applies to casualty losses not due to a presidentially-declared major disaster and to casualty losses due to a pre-COVID-19 presidentially-declared major disaster);
• Extends the deadline by which a property must meet occupancy obligations by providing that the qualified basis of a building for the first year of the credit period is calculated by taking into account any increase in the number of low-income units by the close of the six-month period following the first year of the credit period;
• Extends the noncompliance corrective action period by one year, but not beyond December 31, 2021;
• Extends the 12-month transition period for a tax-exempt bond financed project to satisfy the set-aside for qualification as a residential rental project to September 30, 2021; and
• Extends the two-year rehabilitation expenditure period for tax-exempt bond financed projects to the earlier of one year from the original due date or September 30, 2021.

And, the Notice extends the two compliance monitoring waivers from Notice 2020-53 as follows:

• Building owners are not required to perform income recertifications for the period beginning April 1, 2020, and ending September 30, 2021; and
• State Housing Credit agencies are not required to conduct compliance monitoring inspections or reviews for the period beginning April 1, 2020, and ending September 30, 2021.

The Notice also provides guidance clarifying the following:

• Housing Credit agencies may satisfy their Qualified Allocation Plan public comment requirements through telephonic hearings rather than in-person meetings from April 1, 2020, through September 30, 2021;
• The temporary closure of property amenities and common space facilities from April 1, 2020, through September 30, 2021, in response to the COVID-19 pandemic will not negatively impact a property’s eligible basis; and
• Housing Credit properties may be used temporarily to provide emergency housing for medical personnel and other essential workers providing services during the COVID-19 pandemic regardless of income eligibility.

More than 800,000 older adults call LIHTC-financed apartments home.