Report from Novogradac & Company LLP for the Housing Advisory Group is HERE.
In re the 1602 grant program, which substituted for the LIHTC program when private sector investment in LIHTC dried up, the essence of the arguments in the report seem to me to be:
1. Public agencies won't underwrite as carefully as private investors will.
2. Public agencies won't asset manage as well as private investors.
3. As a result, default rates may approach the 15-25% default rates for 1970 era [40 years ago] HUD Section 236 and Section 221d3 housing development programs.
- The first two arguments would not make me feel good if I was associated with a state housing finance agency.
- The last argument seems like grasping at straws to make the comparative costs for the 1602 grant program appear larger than the LIHTC program.
- The primary virtue of the LIHTC program vs the 1602 program that I can see is that it has a built in cadre of sophisticated (and wealthy) private sector advocates who can help generate political support for the sole remaining substantial volume federal affordable housing development rental program.