On November 10, 2021, IRS issued Revenue Procedure 2021-45 which included a few provisions related to Section 42 low-income housing tax credits.
The minimum rehabilitation expenditures per low-income housing unit for calendar year 2022 is $7,400. This is the minimum per unit cost to meet the substantial rehabilitation test.
The state housing credit ceiling for the low-income housing credit for calendar year 2022 is the greater of 1) $2.60 multiplied by the state population or 2) $2,975,000. Based on 2021 Calendar Year Resident Population Figures from IRS Notice 2021-19, which showed Minnesota’s population at 5,657,342, Minnesota’s 2022 housing credit ceiling would be around $14,709,000. This is down from 2021 which was $2.8125 per capita or $15,911,274.
The amounts used under Section 146(d) to calculate the state ceiling for the volume cap for private activity bonds for calendar year 2022 is the greater of 1) $110 multiplied by the state population or 2) 335,115,000. Based on Minnesota’s population from IRS Notice 2021-19, the 2022 volume cap for private activity bond ceiling would be $622,307,620. The $110 per capita is the same as in 2021.
I believe that there will be an increase in competition for 2022 low-income housing tax credits (both 9% and 4%) with the decrease in the 9% ceiling and no increase in the private activity bonds.