Sunday, May 11, 2014

New IRS Data/Guidance May Offer Options to Help Increase the Use of Oregon Housing Bond and City of Portland Mortgage Credit Certificate Programs.

IRS is issuing a new May 12, 2014 Revenue Bulletin 2014-20, with a Revenue Procedure 2014-31 HERE (PDF page 6) that could impact eligibility limits for the Oregon SF Bond program and the City of Portland Mortgage Credit Certificate program

This follows a March 17, 2014-12 Bulletin, Revenue Procedure 2014-23 (PDF page 35) HERE which spells out updated data sources used to calculate eligible incomes for these programs. 

The publication of the latest Revenue Procedure may allow the revisiting of the calculation of the housing price ratio used to determine the maximum income eligibility limit for certain higher cost metro areas.That ratio combines the relative metro cost of housing and incomes vs. national costs and incomes.

In the absence of a a prior example of the underlying calculation steps (and a very complicated formula) it is not clear to me whether the data in these Revenue Procedures have already been used in either the Oregon State Bond Program or the City of Portland MCC to calculate the current published eligibility limits. (The underlying data has been available for several months).

If this data has not been previously used it is possible that this data may permit the upward adjustment of eligible incomes and/or home purchase sales price limits for either or both of these two (somewhat underutilized) programs. 

In Portland's case such adjustments might be part of an effort to address placed based "workforce housing" needs in the Central city. (A coordinated targeting of existing tax exemptions in Portland with the MCC and/or the Bond program might increase affordability and feasibility). 

Note that both OHCS and the City of Portland have the authority to adopt more restrictive eligibility limits than the IRS guidance would allow. Likely reflecting that discretion, the SF bond income limit and MCC limits for the City of Portland (and Clark county which also has a MCC program from WHFA) are all different. 

A closer look at the eligibility requirements for these programs in Oregon might increase the housing related uses of the underutilized state bond volume cap (the SF bond program produced only 360 loans statewide in 2013, and the 2013 City of Portland MCC [cumulative?] production appears to be 89 loans); the unused volume cap allocated this year to the Private Activity Bond Committee is currently around $200 million.    

Originally created and posted on the Oregon Housing Blog.

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