The IRS has published Rev. Proc. 2012-25, which provides the nationwide average purchase price limits and the average area purchase price safe harbors for the Mortgage Revenue Bond and Mortgage Credit Certificate programs.
The Revenue Procedure sets the national average purchase price at $214,000 for computing the housing cost/income ratio, which provides for an upward adjustment to the percentage limitation in high housing cost areas. This is a decline from the previous year, when the national average purchase price was $220,000. In general, average area and nationwide purchase prices declined.
The IRS is, however, reproposing the method it put forward last year that would change the data source used for purchase price safe harbors in 2013, including using data from HUD regarding county median housing purchase prices instead of FHA loan limits. The IRS is also considering modifications to the HUD price data, because without modifications the HUD data would result in significant declines in purchase price limits, particularly in rural areas.
The IRS is again soliciting comments on this proposed alternative calculation method. If you have comments, including suggested changes to NCSHA’s 2011 letter, please send them to Garth Rieman at email@example.com by Monday, May 14.
This message is provided to you on behalf of NCSHA
April 26, 2012