Applications for affordable housing available for key funding program

A $100 million program meant to construct and rehabilitate affordable housing units is now accepting applications. 

Senate Democratic Appropriations Chairman Vincent Hughes (D-Montgomery/Philadelphia) announced Tuesday that the Housing Options Grant Program-Multi-family (HOP-MF) Program is now accepting applications. 

Established as part of the 2022-23 Pennsylvania State Budget, the $100 million program is funded by the American Rescue Plan Act (ARPA) and will be used to construct and rehabilitate affordable housing units. The HOP-MF Program is operated by the Pennsylvania Housing Finance Agency (PHFA). 

The applications follow the historic 22-23 state budget investment in affordable and workforce housing. 

“My Democratic colleagues and I were able to work across party lines to deliver major investments in housing in the last budget,” Hughes said in a statement. “We are thankful for the leadership from our former governor, Tom Wolf, President Biden, and our leaders in Congress who helped make this possible.” 

Hughes added that investing in affordable housing is a crucial way to restore and rebuild Pennsylvania’s neighborhoods and brighten the future of the state’s communities. 

“All families deserve a safe and healthy place to call home,” said Hughes. “Eligible parties should apply now!” 

The HOP-MF program is made up of three subprograms – the Emergency Grant Initiative, Preservation Initiative, and New Construction Initiative. 

The Emergency Grant Initiative is designed to provide funding for emergency repairs to existing deed-restricted affordable housing throughout the state so existing tenants are not displaced. 

The aim of the Preservation Initiative is to provide funding to rehabilitate properties on a non-emergency basis with the goal of creating/extending the affordability period and making certain sufficient repairs to the property to ensure the stability of the building through the affordability period. 

The New Construction Initiative/Construction Conversion Initiative is designed to provide financing for the construction of affordable rental properties. 

HOP-MF applications are open through 4 p.m. EST on May 23. The application is available online at Housing Options Grant Program-Multi-family Application – HOPMF (hopmfphfa.org). 

Grants will be awarded no later than Dec. 31, 2024, and the entire funding must be spent by Dec. 31, 2026.

PERSPECTIVE: Biden to seek tax changes on high earners, capital gains, some businesses

The Biden Administration recently released detailed tax proposals through the so-called Green Book. If approved, there would be big changes for high-income earners, on capital gains and for some business taxes.

While these proposals would all have to go through the legislative process and therefore may not pass or may be changed, it’s possible some of these may become law and therefore warrant tax planning considerations.

Even if Biden’s proposals don’t become law, there are some automatic taxes changes coming down the road as tax changes in President Trump’s Tax Cuts and Jobs Act only run through 2026. While five years feels like a long time, it’s not when it comes to tax planning.

Here’s what the Biden administration has proposed:

Corporate Tax Rate

Increase the tax rate for corporations from 21% to 28%, effective for taxable years beginning after December 31. Although for taxable years beginning after January 1, 2021 and before January 1, 2022 (i.e., taxable years that straddle 2021 and 2022), the tax rate would be 21%, plus an additional 7% rate times the portion of the taxable income earned in 2022.

Individual Tax Rates

Biden’s proposal would increase the top marginal individual income tax rate to 39.6%. The proposal would be effective for taxable years beginning after December 31, 2021.

In taxable year 2022, the top marginal tax rate would apply to taxable income over $509,300 for married individuals filing a joint return, $452,700 for unmarried individuals (other than surviving spouses), $481,000 for head of household filers, and $254,650 for married individuals filing a separate return.

After 2022, the thresholds would be indexed for inflation using the consumer price index, which is used for all current tax rate thresholds for the individual income tax.

Capital Gains Tax Rates

Under the proposal, long-term capital gains and qualified dividends of taxpayers with adjusted gross income of more than $1 million would be taxed at ordinary income rates, with 37% generally being the highest rate (40.8% including the net investment income tax), but only to the extent that the taxpayer’s income exceeds $1 million ($500,000 for married filing separately), indexed for inflation after 2022.

Biden’s tax plan also says: “A separate proposal would first increase the top ordinary individual income tax rate to 39.6% (43.4% including the net investment income tax).” The effective date is stated to be “after the date of announcement” (which presumably relates the announcement in connection with the American Families Plan of April 28, 2021). Although not entirely clear, the intention appears to be that capital gains would be taxed at the top ordinary income rate, which would be 37% from the date of announcement (April 28, 2021) until 12/31/21, and then 39.6% thereafter.

Capital Gains Tax Rates on Appreciated Property

The proposal treats transfers of appreciated property by gift or on death as realization events. The donor or deceased owner of an appreciated asset would realize a capital gain at the time of the transfer.

  • For a donor, the amount of the gain realized would be the excess of the asset’s fair market value on the date of the gift over the donor’s basis in that asset.
  • For a decedent, the amount of gain would be the excess of the asset’s fair market value on the decedent’s date of death over the decedent’s basis in that asset.
  • That gain would be taxable income to the decedent on the federal gift or estate tax return or on a separate capital gains return. The use of capital losses and carry-forwards from transfers at death would be allowed against capital gains income and up to $3,000 of ordinary income on the decedent’s final income tax return, and the tax imposed on gains deemed realized at death would be deductible on the estate tax return of the decedent’s estate (if any).

Capital Gains Taxes on Unrealized Appreciation

Gain on unrealized appreciation also would be recognized by a trust, partnership or other non-corporate entity that is the owner of property if that property has not been the subject of a recognition event within the prior 90 years, with such testing period beginning on January 1, 1940. The first possible recognition event for any taxpayer under this provision would thus be December 31, 2030.

With this and the other capital gains tax proposals, there are several exclusions.

Taxes on Carried Interests

The proposal will tax carried (profits) interests as ordinary income. Taxing all income allocable to an “investment services partnership interest” as ordinary (and subjecting such income to the self-employment tax) except to the extent allocable to a qualified capital interest.

The proposal would apply to taxpayers with taxable income in excess of $400,000 and would be effective for taxable years beginning after 12/31/21. (Section 1061 – capital gain holding period for partners with carried interests – would continue to apply to taxpayers earning $400,000 or less.)

Self-Employment Taxes

The proposal would eliminate the self-employment tax exception for limited partners who provide services and materially participate. It also would subject all trade or business income to the 3.8% Net Investment Income Tax (NIIT) if not otherwise subject to the self-employment tax.

In particular, for taxpayers with adjusted gross income in excess of $400,000, the definition of net investment income tax would be amended to include gross income and gain from any trades or businesses that is not otherwise subject to employment taxes. S-Corporation, Partnerships and LLC owners who materially participate in the trade or business would be subject to self-employment tax on their distributive shares of the business’s income to the extent that this income exceeds certain threshold amounts.

The exemptions from self-employment tax provided under current law for certain types of S-Corp, partnership or LLC income (e.g., rents, dividends, and capital gains) would continue to apply to these types of income. This provision would eliminate the exception to the NIIT tax for real estate professionals. This proposal would be effective for taxable years beginning after 12/31/21.

Like-Kind Exchanges

The proposal would repeal section 1031 for gain in excess of $500,000 for each taxpayer (and $1 million for married couples filing jointly) each year for real property exchanges that are like kind. The proposal would be effective for exchanges completed in taxable years beginning after 12/31/21. Under this proposal, if a taxpayer begins an exchange in 2021 but does not complete the exchange until 2022, the exchange would be subject to the new rule.

Excess Business Losses

The section 461(l) limitation on excess business losses, which currently is set to expire for taxable years beginning after 12/31/26, would be permanently extended.

New Market Tax Credits

The proposal would permanently extend the New Market Tax Credit, with a new allocation for each year after 2025. These annual amounts would be $5 billion, indexed for inflation after 2026. The proposal would be effective after the date of enactment.

Other Tax Incentives

There are a number of provisions providing tax incentives for housing, energy, and infrastructure.

Next Steps

While these proposals are still up in the air and may not become law, it’s still a good idea to meet with your CPA to talk about your future plans. It’s likely there will be tax changes in the upcoming years – including some that may be significant – and you’ll get the most benefits if you start planning early.

Tony Deutsch, CPA, MT, CGMA is a shareholder at Concannon Miller, a CPA and business advisory firm in Hanover Township, Northampton County. He can be reached at [email protected]

PPP’s extension gave borrowers needed time to apply, funds expected to dry up before end date

An extension to the Paycheck Protection Program (PPP) from March to May allowed more time for small firms and businesses looking to draw from the program for a second time to benefit from it. But without additional funds, the program is expected to dry up soon.

The newest wave of PPP loans began early this year and was signed into law by President Trump in December.

The third round of the program allowed businesses to apply for a second PPP loan if they had 300 or fewer employees, demonstrated a drop in revenue for one calendar quarter compared to the previous year, and showed they used all of their first-round money.

Late last February, the Biden administration revised PPP small business loans to reach smaller, minority-owned firms. However, the federal business loan program was scheduled to end just a month after businesses had a chance to cash in on the significant increase in funds they would receive.

It also gave businesses who were unable to apply for the first round of loans a chance to do so, but because of an eight-week hold on applying for a second round, many of those businesses would have been unable to apply for their second round by the March end date.

Biden signed the PPP Extension Act of 2021 in late March, allowing borrowers to continue to apply for PPP loans until May 31. At the time the act was signed, the Small Business Administration (SBA) had already approved nearly $196 billion out of the $290 billion in funds set aside for the program.

Between businesses applying for their second loan at a max of $2 million and small businesses now borrowing against their gross income rather than their net profit thanks to the new PPP rules approved by the Biden administration, the program is expected to be out of money weeks before the new deadline.

“For the last month and a half the burn rate has been $10 billion a week,” said David Patti, director of communications and marketing at Chester County-based Customers Bank. “The guy who could qualify for $1,000 now qualified for $10,000. That unleashed pent-up demand and there are now a lot more people in line.”

As of April 26, the SBA reported having $18.5 billion left in its PPP loan pool, according to Patti.

Despite the swiftly dwindling funds, the extension has proven to be beneficial for borrowers newly eligible for the program, said Jeramy Culler, vice president and business banking manager at F&M Trust in Chambersburg.

“The changes were made late in this round of the program, and the additional time allows borrowers who were previously ineligible to compile their information and submit applications,” said Culler. “It also provides additional time for those borrowers who didn’t receive a first-draw loan until 2021 to meet the use of funds criteria for a second-round loan. I expect there to be continued interest from borrowers until the money is exhausted or May 31, whichever comes first.”

Banks also had more time and resources to manage the loan applications coming in from borrowers since the first wave of PPP was already behind them.

Last year, lenders had two weeks to prepare for the bevy of borrowers that would knock on their doors. This year, banks were able to take advantage of their experience from 2020, said Matthew Long, chief operating officer of Ephrata National Bank.

“That was in the height of COVID. We weren’t sure what to do from an employment perspective,” he said. “We did a very manual labor-intensive process to do it quickly. As we looked at this further and moved into the second wave, we took advantage of tech because we had more time on our side to reevaluate.”

Recently the SBA launched a new round of Economic Injury Disaster Loan assistance to provide $5 billion in additional assistance to small businesses and nonprofit organizations impacted by the pandemic.

This and other programs such as the $28.6 billion Restaurant Revitalization Fund are part of more targeted aid for businesses compared to the broader PPP, which could help lift up businesses hit hardest by the past year, said Patti.

“The Biden administration thinks it’s time to focus on hotels, restaurants and others and that’s all fair to now say ‘Let’s get help to the people who have lingering problems or problems unique to their sector and be much more tailored to their policy,’” he said.

Taxes, immigration and climate among issues to watch in Biden’s first 100 days, panelists say

Less than one month into the Biden administration, actions taken by the president have indicated a much more progressive approach to governing than in the conservative Trump administration.

More than 30 executive orders signed by Joe Biden so far have mostly overturned many of the more controversial policies of his predecessor.

Like with any change, there will be winners and losers.

Central Penn Business Journal and Lehigh Valley Business spoke with a panel of legal experts on what to expect during the first 100 days of the Biden administration and beyond.

Sectors of the economy most likely to benefit under the administration are health care, manufacturing and technical industries, who will now have a more stable stream of access to foreign-born workers with specialty skills.

The environment and those companies that support clean technology will also likely find a better friend in the Biden administration than they did with Trump. On the flipside, companies involved in fossil fuel are likely to see a drop in subsidies and support.

High-wealth individuals will also likely feel a larger tax impact than they had under Trump, but maybe not as much as they fear.

The legal panel of experts from left to right: S. Graham Simmons III, Melissa Kelso, Steven Koehler, Christian Johnson

Boost to M&A

Melissa L. Kelso of Kelso Law in Carlisle said she is hearing concern from many of her small business clients who are worried about potential changes in the minimum wage and estate taxes could impact their profitability.

“I think one point that I don’t want to overlook, they are concerned things will be less stable, whether that is founded or not,” she said. “They’ve very concerned they are going to see their costs go up.”

She said the minimum wage going from its current $7.25 an hour to $15 is the largest concern she is hearing. “Most of our clients pay above that, but they’re concerned about that making everything go up,” she said.

Meanwhile, she said, concern over issues like estate tax are leading many of her clients, who may have been thinking of selling their business, to wonder if now is the right time.

Christian Johnson, a law professor at Widener University in Harrisburg, agreed that such concerns will likely lead to a short-term jump in merger and acquisition activity. “With big changes on the horizon there’s always going to be a rush for the exits,” Johnson said. “The tax structure is very favorable right now and I don’t think it will get any better.”

Stimulus payback

The big looming concern with taxation is the question of how the government is going to pay for all of the stimulus money it’s handing out now, which will certainly lead to higher taxes in the long run. S. Graham Simmons III, an attorney with Norris McLaughlin in Allentown, said that time will come.

“It will be interesting to see when we get to that point where they look across the aisle and realize we have no choice to raise taxes to pay for what we are doing with the stimulus and spending to get out of the COVID situation,” he said.

The fact that such a conversation isn’t happening now concerns Johnson.

“There appears to be very little thought about how were’ going to pay these amounts back in the long run,” he said. “It’s impossible to say with a straight face that $1.7 trillion dollars isn’t going to have any impact on our economy. It is just total nonsense.”

“I’d be looking to see how this administration is going to look to make changes involving crypto currency and the fintech tax,” said Simmons.

The Biden admin has been more crypto friendly, he noted, and with crypto currency, like Bitcoin beginning to have more widespread acceptance, that could have an impact on the economy.


One issue that the world has been paying particular attention to is how Biden is reversing many of the Trump-era restrictions on immigration, said Steven A. Koehler, an immigration attorney with Stock and Leader in York.

“As an immigration lawyer we’re certainly hoping that Biden’s big shot will be in the immigration field,” he said.

He said the US Citizenship Act of 2021 is expected to expand citizenship to undocumented immigration.

Corporate America, however, is keeping a close eye on the Biden administration renewing accessibility to H-1 Visas, which will help in the recruitment of individuals with specialty skills into fields such as health care, technology and engineering.

“Employing foreign-born workers is vital to our economy. Business will see a more stable playing field in having access to that stable workforce,” he said. “It will definitely affect the health care industry. It will definitely affect the manufacturing industry. A lot of professors are foreign born. It’s probably the most widely used visa in the U.S.”

Going electric

The environment will also be a bigger concern under the Biden administration, said Johnson.

“Biden is pushing for the U.S to become a leader in batteries, electric cars and general electrification,” Johnson said. “That is something Biden could see as a big win for him, it would keep jobs in the auto industry.”

With less subsidies for fossil fuels however, he noted states like Pennsylvania would feel a stronger impact because of the proliferation of coal and fracking gas, so such trends might not be as popular in the Keystone state.

“Sometimes we underestimate just how passionate people feel about climate on both sides,” he said.


Overall, however, the panelists didn’t see huge sweeping changes in any direction.

With an evenly balanced legislature, it may be difficult to get any major legislation passed, and like Trump, Biden may have to rely on executive orders to make some changes.

Even expected tax increases should be tempered, said Johnson.

“You’re going to see a lot of loopholes being closed and he’ll be quite aggressive,” Johnson said. “But, I don’t see congress having the stomach for a huge tax increase.”