President Signs Legislation Including Change to Housing Credit Student Eligibility Rules

President George W. Bush has signed legislation which includes a change to the Housing Credit student eligibility rules.

Public Law 110-142 amends Section 42(i)(3)(D) of the Housing Credit statute which provides eligibility rules under which students may occupy Housing Credit units. Previously, under Section 42(i)(3)(D)(ii) a unit occupied entirely by full-time students would continue to be a qualified low-income unit only if those full-time students were single parents and their children none of which could be claimed as a dependent of another individual or if the full-time students were married and filing a joint tax return. Section 6 of H.R. 3648 changes this provision to allow children of single-parents to be dependents of the other parent. 

Oringinally included in H.R. 3648 the Mortgage Forgiveness Debt Relief Act of 2007, this change was passed by Congres on Tuesday, December 18, 2007. 

H.R. 3648 passed the Senate on December 14th and was returned to the House. The House then passed the bill, as amended by the Senate, on December 18th. It will now be sent to the White House for signature by the President. In keeping with the pay-go system of the 110th Congress, the bill will be fully offset by increased penalties for failure to file S corporation returns or partnership returns, and new requirements for the payment of corporate estimated taxes. 

This provision was originally introduced as S. 1241 by Senator Charles Grassley (R-IA) on April 26, 2007. Working to simplify and conform the student rules found in the Housing Credit and housing bond programs is currently included on the Coalition's legislative priorities list and the Coalition has expressed support for this legislative in previous Congresses. 

In June of 2006, the Coalition supported legislation introduced by Senator Rick Santorum (R-PA), S. 3941, and spearheaded by the National Affordable Housing Management Association which would have included a similar provision striking the requirement that a single parent and their children must not have been claimed as dependents of another individual to qualify for the single parent with children exemption. An industry letter was presented to Senator Santorum on June 2, 2006, and was supported by 7 industry groups including the Coalition.

For more information about the legislation please contact Francine Friedman (202-955-1500 or ffriedman@hunton.com) or Victoria Spielman (202-419-2025 or info@taxcreditcoalition.org).