Five Ways LIHTC Helps Communities Affected by Natural Disasters

When a community is affected by a natural disaster they require resources to rebuild. LIHTC properties help communities affected by disaster in many ways:

  1.  Emergency Relief: Current or upcoming vacancies in LIHTC properties can be used in certain conditions to house displaced households affected by natural disaster. Property owners can work with their legal counsel to house over income tenants in certain conditions.

2.  Tax Credit Allocation Expansion: Tax credits helped the gold coast rebuild housing after Katrina. Tax credit allocations have been increased significantly to states affected by natural disaster.

 3.  Grants: Federal disaster recovery funds, CDBG and Home funds can be combined with LIHTC to repair and increase the availability of housing after a natural disaster.

 4.  Recapture Relief: Property owners are not subject to recapture casualty losses from a major disaster if the loss is restored within a reasonable time. Credits may be taken during the restoration period using the pre-disaster building’s qualified basis.

 5.  Financing Incentives: Federal and state program incentive may be available for LIHTC properties to provide high leverage, long term loans which allow properties to pay off rebuilding costs over a long period of time.