3.7Low Income Housing Tax Credit (LIHTC) Program
The Low Income Housing Tax Credit (LIHTC) Program was created by Congress to generate equity capital for the construction and rehabilitation of affordable rental housing. HOME and Low Income Housing Tax Credits (LIHTC).1 See 26 USC 42. In Michigan, the LIHTC Program is administered by the Michigan State Housing Development Authority (MSHDA). “[LIHTC in Michigan] is an investment vehicle . . . which is intended to increase and preserve affordable rental housing by replacing earlier tax incentives with a credit directly applicable against taxable income.”2
B.Grounds for Eviction/Termination of Lease3
Good cause is required to terminate a tenant’s lease under the LIHTC. Michigan State Housing Development Authority Compliance Manual, Low Income Housing Tax Credit Program (April 2013), p 6-10 and 6-11. MSHDA has issued an approved and recommended Lease Addendum for leases involving LIHTC properties.4 The Lease Addendum contains a list of grounds for termination substantially similar to those required to terminate leases of other subsidized housing properties. See also 26 USC 42(h)(6)(E)(ii)(I); IRS Rev. Ruling 2004-82; IRS Rev. Procedure 2005-37; IRC Section 42(h)(6)(E)(ii).
No federal authorities address the notice of termination requirements (content, manner of service, and time) for LIHTC rental housing. Therefore, the lease provisions and state law govern notice in LIHTC termination cases. MSHDA’s approved and recommended Lease Addendum for leases involving LIHTC properties contains procedural requirements for terminating a tenant’s lease of LIHTC property.5
1 The link to this resource was created using Perma.cc and directs the reader to an archived record of the page.
2 See http://www.michigan.gov/mshda/0,4641,7-141-5587_5601-21934--,00.html.
3 Effective August 3, 2021, the U.S. Centers for Disease Control and Prevention issued an order temporarily halting residential evictions in counties with substantial or high transmission of COVID-19 to prevent the further spread of COVID-19, which was to remain in effect through October 3, 2021. See 86 Fed Reg 43244 (August 6, 2021). However, on August 26, 2021, the United States Supreme Court held that the CDC exceeded its authority in issuing the order and noted that “[i]f a federally imposed eviction moratorium is to continue, Congress must specifically authorize it.” Alabama Ass’n of Realtors v Dep’t of Health and Human Servs, 594 US ___, ___ (2021). For more information, please see the SCAO Memorandum, Eviction Moratorium, and Michigan Legal Help.
4 See the Lease Addendum, pp 1-2, at http://www.michigan.gov/documents/mshda/mshda_crh_l_01_lihtc_lease_addendum_187628_7.pdf.
5 See the Lease Addendum, p 3, at http://www.michigan.gov/documents/mshda/mshda_crh_l_01_lihtc_lease_addendum_187628_7.pdf.