February 7, 2008
OCC Focuses on Low-Income Housing Tax Credit Program
WASHINGTON — The Office of the Comptroller of the Currency (OCC) today published a Community Developments Insights report that describes how the Low-Income Housing Tax Credit (LIHTC) program is used to develop affordable rental housing and the major considerations facing bank investors who invest in these credits.
"Banks and other insured depositories are now providing more than 40 percent of the capital to fund the construction and rehabilitation of affordable housing under the Low-Income Housing Tax Credit program," said Comptroller of the Currency John C. Dugan. "These investments have facilitated the development of hundreds of thousands of units of affordable housing in their communities while at the same time helping them with their Community Reinvestment Act performance."
This Insights report describes the fundamentals of LIHTCs with a particular focus on topics of interest to community bankers new to this product. The report examines the primary risks and regulatory considerations associated with investments in individual projects receiving LIHTCs as well as investments in funds comprising multiple projects. It also describes how such investments would be considered in a bank's Community Reinvestment Act examination.
National banks typically make LIHTC investments under the "Part 24" community development investment authority which encourages bank equity investments in activities that primarily promote the public welfare in a safe and sound manner. Over the past decade, national banks have invested over $15 billion in affordable housing projects under this community development investment authority.
The Insights report can be accessed quickly by selecting "Community Affairs" on the OCC Internet home page, www.occ.gov, and choosing "Publications and Resource Materials."