which is not Federally subsidized for the taxable year, and (ii) 20 percent of the qualified basis of a building not described in clause (i). (C) Method of discounting The present value under subparagraph (B) shall be determined— (i) as of the last day of the 1st year of the 15-year period referred to in subparagraph (B), (ii) by using a discount rate equal to 72 percent of the average of the annual Federal mid-term rate and the annual Federal long-term rate applicable under section 1274(d)(1) to the month applicable under clause (i) or (ii) of subparagraph (A) and compounded annually, and (iii) by assuming that the credit allowable under this section for any year is received on the last day of such year. (2) Minimum credit rate (A) In general The applicable percentage for any building which is not Federally subsidized for the taxable year shall not be less than 5 percent. (B) Minimum credit rate for Federally subsidized buildings In the case of any building to which subparagraph (A) does not apply, except as provided in paragraph (3), the applicable percentage shall not be less than 2 percent. (3) Exception for certain Federally subsidized buildings In the case of any building to which paragraph (2)(A) does not apply, the applicable percentage is zero unless— (A) a credit is allowed under section 42 with respect to such building for the taxable year, and (B) such building is financed by tax-exempt bonds as described in section 42(h)(4). (4) Cross references (A) For treatment of certain rehabilitation expenditures as separate new buildings, see subsection (e). (B) For determination of applicable percentage for increases in qualified basis after the 1st year of the credit period, see subsection (f)(3). (C) For authority of housing credit agency to limit applicable percentage and qualified basis which may be taken into account under this section with respect to any building, see subsection (h)(6). (c) Qualified basis