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summer 2005

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A Look Inside...

Investing in Low-Income Housing Tax Credits

How LIHTC Funds Can Help Banks Invest in Affordable Housing

LIHTC Internet Resources

LIHTC Investment Performance

NASLEF Contact Information

Side by Side Investing

Helpful Hints for First-Time Bank Investors in LIHTC

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This Just In... OCC's Districts Report on New Investment Opportunities for Banks
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Investment Resources for Part 24 Authority

Part 24 Resources on the Web

Common Part 24 Questions

CD Investment Precedent Letters

Investments in National/Regional Funds

Fourth Quarter 2005
Part 24 Investments

Regulation and CD-1 Form

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OCC's Community Affairs Department

(202) 874-5556


Articles by non-OCC authors represent their own views and are not necessarily the views of the OCC.

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A Look Inside

A photo of Camden Commons, in Preble County, Ohio

Every year, for nearly the past two decades, low-income housing tax credits (LIHTCs) have been directly responsible for the construction or rehabilitation of more than 100,000 new affordable rental units for families in need. This popular federal program - which was created by the Tax Reform Act of 1986 -leveraged approximately $7.5 billion in private equity capital in 2005 and has been the driving force behind much of the new affordable housing being produced today. Banks are important contributors to this success through their investments in LIHTCs. These transactions are typically organized as limited partnerships or limited liability companies, and banks make their investments through those entities.

Despite the effectiveness of this program, we have observed that many banks may be unfamiliar with the mechanics of investing in LIHTCs. This issue of Community Developments Investments focuses on how banks can earn a solid economic return on their capital and receive positive consideration toward their rating under the Community Reinvestment Act (CRA).

Full Story...

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_ Investing in Low-Income Housing Tax Credits

A photo of Auburn Courts in Massachusetts

For community banks that may be unfamiliar with the concept, the low-income housing tax credit (LIHTC) program makes federal tax credits available to owners of affordable rental properties. The credits owe their existence to the Tax Reform Act of 1986 and were intended to facilitate the development of low-income rental property. Since their inception, the program has been instrumental in the construction or rehabilitation of more than 1.6 million affordable housing units that otherwise might not have been built.

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_ How LIHTC Funds Can Help Banks Invest in Affordable Housing

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More than 150,000 low-cost apartments leave the affordable housing inventory every year because of deterioration, rent increases, or abandonment. This loss of affordable housing takes a toll on low- and moderate-income families, challenges employers, and contributes to the destabilization of entire neighborhoods.

Fortunately, certain tools are available to banks and others that can help to stem this loss. Chief among these, low-income housing tax credits (LIHTCs) provide a significant means of financing the creation of new affordable apartments while simultaneously helping to stabilize neighborhoods by improving quality and supply. LIHTCs were responsible for about $7.5 billion of private investment in 2005, that will produce approximately 140,000 units with rents that stay within the reach of low- and moderate-income households for at least 30 years.

Full Story...