Press Contact Only:
Margaret Matrone, NCHFA, 919-877-5606,
Connie Helmlinger, NCHFA, 919-877-5607,
North Carolina will gain $220 million in affordable rental apartments as the result of federal tax credits and other financing approved last week by the Tax Reform Allocation Committee and North Carolina Housing Finance Agency. Two additional developments with 229 affordable apartments will be financed through the sale of $9.3 million of tax-exempt bonds.
The 32 developments financed with tax credits will provide 2,266 privately owned, affordable apartments in 19 counties. More than 60 percent of the apartments (1,395 units) will be designated for families, and 871 will house elderly residents. [See list of housing developments by county.]
The developments will receive $16.2 million of federal Housing Credits, as approved by the committee, which consists of Secretary of Commerce James Fain, State Treasurer Richard Moore and State Budget Officer David McCoy.
In addition to the federal tax credits, the new rental housing will receive $7.9 million of loans approved by the N.C. Housing Finance Agency’s board of directors, as well as state tax credits as authorized by the General Assembly. The loans and state tax credits make it possible to build new apartments in rural counties where the median income is low, and to decrease the rents in urban counties.
This year, 80 percent of the apartments will be affordable to North Carolinians whose incomes are lower than the federal tax credit program can reach by itself. Nearly 2,000 apartments will be affordable to renters who earn 50 percent or less of local median income, rather than the federal target of 60 percent of median. In Raleigh , that reduces the maximum income needed by a family of four from $42,780 a year to $35,650. In Hertford, Onslow, Robeson or Surry counties, where the median income is much lower, a family of four could afford one of the apartments on $22,600 a year, rather than $27,120. Rents for more than a quarter of the apartments will be affordable for people whose incomes are lower still—40 percent of median or less.
“Through state tax credits, the General Assembly created new housing opportunities for working families and elderly people across the state,” said Lucius Jones, chairman of the N.C. Housing Finance Agency. “The additional financing from state tax credits has made the rents more affordable.”
The 32 developments were selected from an original field of 137proposals, of which 90completed the two-stage application process.
The N.C. Housing Finance Agency evaluates the properties on behalf of the Tax Reform Allocation Committee, beginning with independent site and market studies of each property, site visits by agency staff, and invitations for comments by local governments. Each property is also rated for rent affordability, financial structure, capability of the development team, special targeting by location or population, and architectural design.
The federal Housing Credit Program finances virtually all of the affordable rental developments now being built nationwide. In North Carolina , the program has financed 44,000 privately owned, affordable apartments since it began in 1987.
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 applies to developments in counties with the lowest median incomes.
The N.C. Housing Finance Agency is a self-supporting public agency created by the General Assembly in 1973. The Agency receives no state tax funds for its operating expenses. It has financed more than 164,000 affordable homes and apartments statewide.
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