Press Contact Only:
Margaret Matrone, NCHFA, 919-877-5606,
Connie Helmlinger, NCHFA, 919-877-5607,
North Carolina will gain $263 million in affordable rental apartments as the result of federal tax credits approved last week by the Tax Reform Allocation Committee and loans from the North Carolina Housing Finance Agency.
The new awards will produce 2,373 privately owned, privately-managed affordable apartments in 29 counties, bringing the total number of Housing Credit apartments built in the state since 1987 to more than 50,000 units. Nearly 66 percent of the recently approved apartments (1,562 units) will be designated for families, and 811 units will house elderly residents.
“North Carolina is one of the first states to benefit from improvements in the Housing Credit Program that became law July 30,” said Lucius S. Jones, chairman of the N.C. Housing Finance Agency. “We’re very proud of the excellent apartments that Housing Credits are producing here, and we expect the new provisions to make the program even more effective.”
The Housing and Economic Recovery Act of 2008 increases the amount of tax credits available in 2008, providing the 44 North Carolina developments that were approved last week with an additional $1.8 million of tax credits. It also replaces a floating calculation of the credit amount with a more predictable, fixed rate. Jones expects the effect “will make investing in Housing Credit apartments even more attractive.” He said, “The changes will help us to produce more affordable apartments for working families.”
The new developments will include 256 apartments for persons with disabilities, affordable to persons living on Supplemental Security Income (SSI) of approximately $660 a month. Rent assistance is available for these apartments under an initiative financed by the General Assembly and offered through a cooperative arrangement between the Housing Finance Agency, the N.C. Department of Health and Human Services, local service organizations, and the apartment owners and managers.
Eighteen of the apartment developments will also receive $12.8 million of loans approved by the N.C. Housing Finance Agency’s board of directors, and 43 will receive state tax credits as authorized by the General Assembly. The loans and state tax credits make it possible to build new or rehabilitate existing apartments in rural counties where incomes are low, and help to reduce the rents in urban counties.
All of the apartments will be affordable to North Carolinians whose incomes are at 60 percent or less of the median. This ranges from $44,940 for a family of four in Raleigh to $28,860 in lower income areas such as Robeson or Vance counties. Adding state tax credits to the federal housing credits makes some of the apartments affordable to households with incomes at 50 percent or less of the median. This ranges from $37,450 for a family of four in Raleigh down to $24,050 in Robeson or Vance counties.
The N.C. Housing Finance Agency evaluates the tax credit applications on behalf of the Tax Reform Allocation Committee, which consists of Secretary of Commerce James Fain, State Treasurer Richard Moore and State Budget Officer David McCoy.
To recommend the 44 properties, the N.C. Housing Finance Agency evaluated 110 applications for federal tax credits. The evaluation consists of independent market studies of each property, site visits by agency staff, and invitations for comments by local governments. Each property is rated for architectural design, rent affordability, financial stability, capability of the development team, and statewide distribution.
To make the properties economically viable at below-market rent levels, the owners are allowed to take a credit on their federal income tax of 9 percent of the eligible costs, for a period of 10 years. Properties that receive federal credits are also eligible for a one-time state tax credit of 10, 20 or 30 percent of the eligible development cost, depending on the county where the housing will be built. The largest state credit percentage applies to developments in counties with the lowest median incomes.
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The North Carolina Housing Finance Agency is a self-supporting public agency. It has financed 184,000 affordable homes and apartments in the last three decades, including nearly 74,000 homes for first-time home buyers. To learn more, go to www.nchfa.com or call 919-877-5700 or 800-393-0988.
