Section 1602 Program
In February 2009, President Barack Obama signed the American Recovery and Reinvestment
Act of 2009 (ARRA), which includes relief for stalled federal Low Income Housing
Tax Credit (tax credits) projects. Under Section 1602 of ARRA, State Housing Finance
Agencies (HFAs) may apply to the U. S. Treasury for an exchange of returned or unused
CY 2007 and 2008 tax credits, as well as 40% of the State HFA’s 2009 tax credit
ceiling. Tax credits will be exchanged at a rate of $8.50 per $1 of tax credit and
these funds may be subawarded by an HFA to tax credit eligible properties that have
made good faith efforts but been unsuccessful in finding investors for their Tax
Credits. On May 4, 2009, the U.S. Treasury Department made available guidance and
an application package entitled “Grants to States for Low-Income Housing Projects
in Lieu of Low-Income Housing Credits for 2009.” On June 26, 2009, the Department
filed the Section 1602 application with an initial request to exchange 40% of its
2009 tax credit allocation (about $5.6 million) for approximately $44 million of
funds from Treasury. The U.S. Treasury Department approved DHCD’s application
on July 7, 2009. On September 11, 2009, DHCD submitted a second application for
approximately $35 million in Section 1602 funds in exchange for returned CY 2008
tax credits. The U.S. Treasury Department approved this second request on September
21, 2009. Section 1602 funds must be spent on project costs by December 31, 2010
with a limited exception detailed in Amendment 1 to the Grantee Terms and Conditions
(copy below).
State of Maryland American Recovery and Reinvestment Act of 2009 Website
Current Status and Reports
DHCD has made subawards of Section 1602 Grant Funds to the following projects:
Section 1602 Quarterly Progress Reports from MDHCD to Treasury:
Program Administrative Documents
Additional Information
The Department’s Section 1602 Program may change as Treasury issues new information.
Additional information on the Section 1602 Program is available at: