will accept written comments during this thirty-day period and will consider any comments presented at the public hearing, prior to completion of the plan. LOW INCOME HOUSING TAX CREDIT PROGRAM SUMMARY A. The Tax Reform Act of 1986 established the Tax Credit Program to stimulate private sector investment in low income rental housing. In August of 1993, permanency was granted to the Tax Credit Program after numerous temporary annual extensions. There are numerous technical rules governing a Project’s qualification for Tax Credits. The following is a summary of certain key provisions of Section 42 of the Code and regulations, and the Tax Credit Program. Applicants are advised to review Section 42 of the Code directly for further detail, since this overview does not address all of the provisions. Capitalized terms, when not defined in the text of this document, are defined in or in Section 42 of the Code. B. The State of New Mexico, for the calendar year 2015, will receive a population based Tax Credit allocation equal to $2.15 (indexed for inflation) per resident. The current year’s population estimates, as provided by the Internal Revenue Service, and the estimated Annual Credit Ceiling, including any carry-forward, returned or national pool Credits received by the State, may be found on the MFA web site. C. A minimum of 10 percent of the Annual Credit Ceiling must be allocated each year to Projects involving Qualified Nonprofit Organizations. MFA’s Allocation Set Asides (see ) are intended to implement this requirement. However, Qualified Nonprofit Organizations may also apply for Tax Credits in excess of these Set Asides. For the purposes of identifying Applicants eligible for this Allocation Set Aside, several requirements must be met, as described in Code Section 42(h)(5). A Qualified Nonprofit Organization is an organization described in Sections 501(c)(3) or 501(c)(4) of the IRS Code and exempt from tax under Section 501(a). The production of decent, safe and affordable housing must be one of the defined goals, objectives, or purposes of the nonprofit organization. The nonprofit organization must materially participate in the Project, meaning that the organization must be involved on a regular, continuous, and substantial basis in both the development and operation of the Project during the term of the Compliance Period. The nonprofit must also own an interest in the Project throughout the Compliance Period and may not be affiliated with or controlled by a for-profit organization. D.
“Average Gross Median Income” or “AGMI” means, for a Project, the average area gross median income level(s) at which units are set aside, weighted by the number of units set aside at each income level. AGMI calculations are rounded to the nearest whole number. Market Rate Units will be treated as if they were set aside at 100 percent of Area Gross Median Income. An example of the calculation of AGMI in a 60-unit Project with no management employee units is as follows: 25 percent of the units are Set Aside at 50 percent of Area Gross Median Income; and 50 percent of the units are Set Aside at 60 percent of Area Gross Median Income; and 25 percent of the units are Market Rate. The AGMI calculation would be as follows: Percent of Set Aside Income Level Weighted Total Units (As a % of Median) Average 25% X 50% = 13% 50% X 60% = 30% 25% X 100% = 25% Total AGMI: AGMI for Scoring 68% Units to be provided for management or maintenance staff rent free should not be included in the calculation. “Average Gross Median Rent” or “AGMR” means, for a Project, the average area gross median rent level(s) at which units are Set Aside, weighted by the number of units Set Aside at each rent level. AGMR calculations are rounded to the nearest whole number at each stage of the calculation. Market Rate Units will be treated as if they were Set Aside at 100 percent of Area Gross Median Income. An example of the calculation of AGMR in a 60-unit Project with no management employee units is as follows: 25 percent of the units are rent restricted at 50 percent of Area Gross Median Income; and 50 percent of the units are rent restricted at 60 percent of Area Gross Median Income; and 25 percent of the units are Market Rate (not rent restricted). The AGMR calculation would be as follows: Percent of Rent Restricted Level Weighted Total Units (As a % of Median Income) Average