WASHINGTON -- Snags in proposed Housing and Urban Development Department rules could make it difficult for private nonprofit organizations to use tax-exempt financing to buy low-income housing units under a new federal program lawmakers and lobbyists say.

Legislation passed by Congress last year encourages the organizations to purchase the units from private developers as a way to keeping the projects from being converted into more expensive properties. Housing industry officials had predicted the organizations would buy the properties using mortgage loans financed with billions of dollars of tax-exempt 501(c)(3) bonds.

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