Low-Income Housing Credit Act of 1989

Low-Income Housing Credit Act of 1989 - Amends the Internal Revenue Code to make permanent the low-income housing income tax credit (under current law the credit will expire after tax year 1989).

Permits States a one-year carryover of unused credit authority. Assigns carryovers to the Secretary of Housing and Urban Development to allocate to eligible States applying for excess credit.

Allows the credit only if an extended low-income housing commitment (beyond the current 15-year period) is in effect with respect to any building for the relevant taxable year. Describes procedures to effect transition to a non-low-income use in connection with such extensions.

Permits the credit in connection with the acquisition of an existing building only if the taxpayer incurs rehabilitation expenditures of at least $3,000 per unit.

Revises rent restrictions to: (1) declare unnecessary a required rent reduction below the initial rent if the median gross income of the area decreases; (2) permit higher rent if units are occupied by higher income individuals and the project has an operating deficit; (3) base income limitations on the number of bedrooms in a unit; and (4) use State median gross income in certain low-income housing status determinations.

Broadens categories of existing buildings eligible for a waiver of the ten-year requirement for the low-income housing credit.

Revises credit provisions relating to single-room occupancy units and special needs housing.

Revises restrictions that limit credit benefits in connection with buildings financed with tax-exempt bonds and below market loans.

Permits the credit to be allocated: (1) on a project basis; and (2) in connection with owner-occupied buildings of four units or less if a development plan is submitted.

Directs housing credit agencies to adopt plans for allocating credit amounts among projects, prohibiting the credit with respect to any building not included in such a plan.

Modifies at-risk rules in connection with buildings subject to the historic rehabilitation credit and those associated with financing provided by certain nonprofit organizations.

Sets the tax credit rate on a semiannual basis rather than monthly.

Increases the credit in connection with buildings in high cost areas (low-income census tracts or difficult development areas).

Establishes special rules for determining the eligible basis and applying at-risk rules in connection with qualified buildings acquired in foreclosures.