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How a simple accounting change can attract more capital to affordable housing

by Ronald Diner, Raymond James Tax Credit Funds, Inc.

NHC invites guest blog posters to write on important housing topics.  The views expressed by guest posters do not necessarily reflect those of NHC or its members.

Ron Diner

As those of us in the housing world know well, the Housing Credit is the primary federal program that develops and preserves affordable rental housing. Existing accounting rules are keeping this incredible resource from being used to its fullest potential. Currently, companies must report the costs of Housing Credit investments pre-tax while the benefits for their Housing Credit investments are reported on the tax line. This results in reduced pre-tax earnings with the benefits reported after tax, and is proving problematic for many investors.

There is a quick and simple way to fix the problem, attract new capital and create new investment in affordable housing: move the cost and benefits to the same side of the tax line.

Many Housing Credit stakeholders are hoping for feedback soon from the Federal Accounting Standards Board (FASB) to a white paper developed as part of an effort to win approval for allowing public companies to change the method of accounting for Housing Credit investments on their financial statements. The white paper was commissioned by an informal 20-member task force, led by Raymond James Tax Credit Funds, Inc., and comprised of syndicators, investors, and others. The paper was prepared by Novogradac & Company LLP and Reznick Group (now CohnReznick). The paper was presented to the FASB in the last few months, and the Emerging Industry Task Force (EITF) now has it included as part of their March 14 meeting. The EITF was designed to minimize the need for the FASB to spend time and effort addressing narrow implementation, application, or other emerging issues that can be analyzed within existing generally accepted accounting principles (GAAP).

Stakeholders favor a change by the FASB to its current rules to allow public companies to report the costs of and benefits from their Housing Credit investments in the same part of the financial statements—either both above the pre-tax line, or both on the tax line.

In connection with the EITF meeting, the task force, working with the Financial Services Roundtable, plans to provide the EITF members with a he letter that would encourage the Financial Accounting Standards Board to change the accounting practices governing the Credit in a way that will help better attract investment. You can help by signing onto the letter. Click here to read the sign-on letter.

If you agree to add your organization’s name to the letter, please email your approval by February 11 to me at

Ronald Diner is Executive Chairman at Raymond James Tax Credit Funds, based in St. Petersburg, Florida. Raymond James has been sponsoring affordable housing since 1969, and has raised more than $4 billion in equity for more than 1,300 properties across the country since the inception of the Tax Credit program in 1986.

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