Administrative Code

Virginia Administrative Code
Title 13. Housing
Agency 5. Department of Housing and Community Development
1/29/2020

Chapter 175. Rules and Regulations for the Virginia Low-Income Housing Tax Credit

13VAC5-175-10. General requirements and application.

A. To qualify for the Virginia low-income housing tax credit, the applicant must qualify for and claim the federal low-income housing tax credit in accordance with 13VAC10-180, Rules and Regulations for Allocation of Low-Income Housing Tax Credits. The Virginia Housing Development Authority allocates the federal low-income housing tax credit in Virginia.

B. The Department of Housing and Community Development (the department) is designated to approve, allocate, and certify the use of the Virginia low-income housing tax credit. An application for certification to use the state tax credit must be filed with the department, on a form prescribed by the department. The application shall provide taxpayer identification, information regarding the housing unit or units for which a tax credit is sought, and information confirming the allocation of the federal low-income housing tax credit during the taxable year. The department may require any additional information and documentation. After reviewing applications, the department shall notify each applicant of the total Virginia low-income housing tax credit allocated for use by the applicant. The department shall certify the total Virginia low-income housing tax credit allocated for use by each approved applicant to the Department of Taxation or the State Corporation Commission.

Statutory Authority

§ 36-55.63 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 16, Issue 4, eff. October 20, 1999; amended, Virginia Register Volume 18, Issue 7, eff. January 1, 2002.

13VAC5-175-20. Availability of Virginia low-income housing tax credit.

The Virginia low-income housing tax credit is available for qualified housing units placed in service on or after January 1, 1998, in accordance with § 36-55.63 of the Code of Virginia. The state tax credit for each project is based on a percentage of the federal tax credit allowed and claimed for the project. Any portion of the amount allocated may be used during the first year of the allocation, if feasible, or may be carried forward and used in subsequent years in accordance with § 58.1-435 of the Code of Virginia. The amount of a state low-income housing tax credit that may be used for any project during any tax year shall not exceed the amount certified as feasible by the Virginia Housing Development Authority.

Statutory Authority

§ 36-55.63 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 16, Issue 4, eff. October 20, 1999; amended, Virginia Register Volume 18, Issue 7, eff. January 1, 2002.

13VAC5-175-30. Amount and allocation of the Virginia low-income housing tax credit.

The department shall allocate the Virginia low-income housing tax credit up to the maximum amount allowed during any calendar year as specified by § 36-55.63 of the Code of Virginia. The department shall review each application and, based on the application and other information available to the department, shall assign points to each project as follows:

1. Any project that qualifies as a "hard-to-develop" project as defined by the Virginia Housing Development Authority in the federal low-income housing tax credit application manual. (40 points)

2. Any project that is located within, or that if awarded a state low-income housing credit will locate within, a Virginia Enterprise Zone, a Virginia Housing Revitalization Zone or a "revitalization area" as defined by the Virginia Housing Development Authority, provided the development of low-income housing within such zones or areas was included as part of the application under the above-referenced community development programs. (40 points)

3. All other qualified low-income housing projects not qualifying for points in subdivision 1 or 2 of this section. (20 points)

4. One bonus point for each residential unit reserved for households at or below 40% of area median income, as determined by the application for federal low-income housing tax credits (up to a maximum of 40 bonus points).

The state credit allocated may be used any time during the five-consecutive-year period beginning with the first year the federal low-income housing tax credit is claimed for the project. The allowable amount of the Virginia low-income housing tax credit for any qualified applicant shall be the lesser of (i) 20% of the amount of the federal low-income housing tax credit allowed during the five-year period or (ii) the amount certified as feasible by the Virginia Housing Development Authority. Upon assignment of points to all applications, the department shall rank the applications based on the number of points assigned. Those applications assigned more points will be ranked higher than those applications assigned fewer points. Applications with the highest rankings shall receive allocations up to the allowable amount prior to any allocations to lower ranking applicants.

Allocations will be made to projects up to the statutory maximum amount of tax credits allowed during the calendar year.

In the event of a tie in the number of points assigned to two or more projects where a full allocation to each applicant with that point total would exceed the maximum tax credit amount authorized by statute during any calendar year, the department shall calculate a pro rata reduction of the amount of tax credit to be allocated to each approved applicant. This reduction shall be made to assure that the established maximum tax credit allocation is not exceeded. The pro rata reduction will not apply to or affect allocations to projects with a higher point total.

Statutory Authority

§ 36-55.63 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 16, Issue 4, eff. October 20, 1999; amended, Virginia Register Volume 18, Issue 7, eff. January 1, 2002.

13VAC5-175-40. Recapture of Virginia low-income housing tax credit.

The Virginia low-income housing tax credit is a percentage of the federal low-income housing tax credit allowed and claimed. If any person claims the Virginia low-income housing tax credit and is subject to the credit recapture provisions for federal income tax purposes in a subsequent taxable year, the applicant shall, similarly, be subject to a recapture of the state tax credit amount claimed on the Virginia income tax return. The percentage of the federal tax credit recaptured will be used to calculate the amount of the state tax credit to be recaptured. The total recaptured amount of the state tax credit shall be payable to the Virginia Department of Taxation or the State Corporation Commission during the taxable year in which the federal recapture is required.

Statutory Authority

§ 36-55.63 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 16, Issue 4, eff. October 20, 1999; amended, Virginia Register Volume 18, Issue 7, eff. January 1, 2002.



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