Currently, most low income housing properties are being developed through the mechanism of low income housing tax credits.  These credits are funded by the Federal Government and are awarded through an annual approval process by the Maryland Department of Housing and Community Development. Such properties are often referred to as “Section 42” properties and the procedure for assessing these special use properties is outlined in Topic 14-100-050 of the Maryland Assessment Procedures Manual.

Other forms of low income housing will be encountered, having been developed from older pre-existing subsidy programs or through more targeted federal programs.  Many of these programs will include one or several of the following subsidy elements:

1.  Regulatory restrictions recorded with the deed.
2.  Low interest rate financing.
3.  Housing assistance payment contracts.
   4.  Non–repayment loan provisions, for both the primary and secondary financing sources.
5.  Limited dividend restrictions.
6.  Replacement and reserve requirements.
7.  Regulatory qualifications for low income tenants.
8.  Formal reporting of income and expenses, usually in an audited format.

The specific terms and agreements associated with the operations of such properties will vary greatly from one project type to the next.  Federal Housing Act (FHA) programs are typically older, and will tend to have uniform property restriction for each applicable program: Section(s) 202, 207, 221d3, 221d4, 223f, and 236.  Within these housing incentive programs, various refinancing and redevelopment programs may also be seen.  The US Department of Agriculture, Farmers Home Loan 515 program has similar characteristics.  In many cases, these programs will offer overlapping funding sources for the Low Income Housing Tax Credit properties. 

In order to make the valuation of low income housing more uniform, all forms of low income, subsidized housing properties shall be assessed in the same manner as outlined for Section 42 property.  Verification of the continued binding regulatory deed restrictions may be necessary when the property is transferred to new ownership.  All forms of subsidized housing (BPRUC 1800 series) will be treated accordingly.

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