Affordable Housing Credit Improvement Act of 2016

Affordable Housing Credit Improvement Act of 2016

This bill amends the Internal Revenue Code, with respect to the low-income housing credit, to rename the credit "the affordable housing credit" and make several modifications to the credit.

The bill increases state allocations for the credit and modifies the cost-of-living adjustments. It also revises tenant eligibility requirements, with respect to:

• the average income test,
• income eligibility for rural projects,
• increased tenant income,
• student occupancy rules, and
• tenant voucher payments that are taken into account as rent.

The bill revises various requirements to:

• establish a 4% minimum credit rate for certain projects,
• permit relocation costs to be taken into account as rehabilitation expenditures,
• repeal the qualified census tract population cap,
• require state housing credit agencies to make certain determinations regarding community revitalization plans,
• prohibit local approval and contribution requirements,
• increase the credit for certain projects designated to serve extremely low-income households,
• increase the credit for certain bond-financed projects designated by state agencies, and
• eliminate the basis reduction for low-income housing properties that receive certain energy-related tax credits and deductions.

The bill also modifies requirements regarding the reconstruction or replacement period after a casualty loss, rights related to building purchases, the prohibition on claiming acquisition credits for properties placed in service in the previous 10 years, and projects that assist Native Americans.