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(AUSTIN) – The Texas Department of Housing and Community Affairs (TDHCA) has announced awards through the 2020 Housing Tax Credit (HTC) Program allocation that will help finance the development or rehabilitation of rental properties offering reduced rents and increased housing options throughout the state. The awards are made possible through the Competitive (9%) HTC Program.
TDHCA will provide $81.6 million in housing tax credits to private developers constructing or rehabilitating 71 properties (totaling 5,296 units) across the state that will offer rents affordable to households earning up to 60 percent of the area median family income. Investors purchasing credits allocated to developers may apply the credits toward their federal tax liability each year for 10 years on a dollar-for-dollar basis in exchange for their investment in the property; marking today’s awards an approximate value of $810 million over the 10-year term.
“With today’s awards, TDHCA continues its efforts to establish or rehabilitate high-quality and affordable housing for working families and elderly Texans,” explained Bobby Wilkinson. “The housing tax credit programs serve not only as essential financial tools to aid in the development and construction of affordable housing, but also help local economies with strong job creation.”
This year’s Competitive 9% HTCs are expected to help finance the building of 54 high quality, new properties with a total of 4,359 units, and the rehabilitation of 17 properties offering 937 units to income-eligible households across the state. The at-risk set aside, totaling more than $12 million for the 2020 cycle, is used for the rehabilitation or reconstruction of aging housing developments that could soon lose rental subsidies provided to their low-income residents.
In 2019, the HTC Programs (Competitive 9% and Non-competitive 4% HTC Programs) accounted for more than $136 million (par value of $1.36 billion) being awarded to developers to help in the construction or rehabilitation of more than 120 multifamily properties, with more than 12,500 units being preserved or built. It’s estimated that the new construction and rehabilitation of those developments, alone, led to the creation of more than 25,000 jobs statewide, and produced an approximately $4.2 billion economic impact for the state**.
The Housing Tax Credit Program, authorized under the Internal Revenue Code, is the state’s primary means of directing private capital toward the development of affordable rental housing. Developers use proceeds from the sale of the credits as financing for their property. The credits announced today are designed to cover approximately 70 percent of each property’s eligible development costs.
*As of December 2019.
**total does not include job creation, increased property tax valuations, and economic activity made possible by reduced rents.
About the Texas Department of Housing and Community Affairs
_The Texas Department of Housing and Community Affairs is committed to expanding fair housing choice and opportunities for Texans through the administration and funding of affordable housing and homeownership opportunities, weatherization, and community-based services with the help of for-profits, nonprofits, and local governments. For more information about fair housing, funding opportunities, or services in your area, please visit www.tdhca.state.tx.us or the Learn about Fair Housing in Texas page. _