1. Legislative Outlook for Housing CAHEC Partners Conference Robert Rozen Washington Council Ernst & Young May 2013

2. Page 2 ►Low-Income Housing Tax Credit ►CRA ►Housing Programs ►NMTC ►GSE Reform

3. Page 3 Status of Tax Reform Discussions ►House Ways and Means Committee ►11 Working Groups (April to May) ►Discussion Drafts ►Senate Finance Committee ►10 Issue Areas (Through June)

4. Page 4 Ways and Means – 11 working groups ►Charitable /Exempt Organizations ►Debt, Equity and Capital ►Education and Family Benefits ►Energy ►Financial Services ►Income and Tax Distribution ►International ►Manufacturing ►Pensions/Retirement ►Real Estate ►Small Business/Pass Throughs

5. Page 5 Senate Finance – 10 subject areas for Member discussion ►Simplification ►Small business; corporate investment and innovation ►Families, education, and opportunity ►Infrastructure, energy, natural resources ►Types of income, investment, tax structures ►Economic security, health, retirement, and insurance ►International competitiveness ►Economic and community development ►Tax exempt organizations and charitable giving ►Non-income tax issues and related reforms

6. Page 6 Senate Finance – Economic and Community Development LIHTC Options, May 15, 2013 ►Repeal ►Replace with exemption on rental income ►Replace or supplement with renters credit ►Make permanent the 9% credit rate ►Permit exchange of private activity bonds ►Limit nonprofits controlled by for-profits ►Repeal 130% credit authority

7. Page 7 Status of Tax Reform Discussions Efforts to Move Process Forward ►Chairman Camp and Chairman Baucus ►Weekly meetings ►Joint Hearings ►WSJ op-ed ►TaxReform.gov ►Next Steps?

8. Page 8 Status of flat 9%/4% credit rate legislation ►Current Law – Allocations by end of 2013 ►House Legislation ►Congressmen Tiberi and Neal ►Senate Legislation ►Senators Cantwell and …… ►Expiring Tax Provisions, December 31, 2013

9. Page 9 Obama FY 2014 Budget Reform and Expand the Low-Income Housing Tax Credit ►Allow states to convert private activity bond volume cap ►Encourage mixed-income occupancy ►Change formula in lieu of flat 9% credit rate ►Add preservation of federally assisted housing as criteria ►Permit REITs to invest in LIHTC

10. Page 10 Community Revinvestment Act ►March, 2013 – Proposed Qs and As ►Investments in broader statewide or regional area considered in evaluation if in support of organization or activity that covers but is larger than the institution’s assessment area ►As long as such activities are not conducted to the detriment of activities within the assessment area, considering the community development needs and opportunities within the assessment area

11. Page 11 New Markets Tax Credit ►Expires at end of 2013 ►Extension of expiring tax provisions ►Introduction of legislation to extend program ►President’s budget proposal ►Tax Reform ►April awards ►Next application round

12. Page 12 Budget Pressures on Housing Program ►Budget Control Act of 2011 ►Budget Caps ►Sequestration ►Impact on voucher program ►125,000 households ►Impact on property based section 8 ►$1.2 billion cut; budget proposes short funding ►HOME, CDBG

13. Page 13 Bipartisan Policy Center Housing Commission ►Housing Finance Reform ►Single family and multifamily ►Affordable Rental Housing ►Rental assistance – ELI proposal ►LIHTC – 50% increase ►Short-term emergency rental assistance ►Public housing ►Financing the Costs ►Single family housing tax subsidies

14. Page 14 Housing Finance Reform What Will Congress do with Fannie and Freddie? ►GSEs in conservatorship since 2008 ►Borrowed $180 billion from Treasury ►Government has largely got its money back ►OMB estimates $220 billion in receipts from GSEs over next ten years ►How will this impact ability to establish new housing finance system? ►90% of all single family mortgages government backed ►Multifamily also substantially government backed