Press Contact Only:
Margaret Matrone, NCHFA, 919-877-5606,
Connie Helmlinger, NCHFA, 919-877-5607,
North Carolina will gain $210 million in affordable rental apartments as the result of federal tax credits and other financing approved by the Tax Reform Allocation Committee and North Carolina Housing Finance Agency. Two additional developments with 415 affordable apartments will be financed through the sale of $13.9 million of tax-exempt bonds.
The $16.8 million of tax credit awards will finance 39 developments providing 2,078 privately owned, affordable apartments in 27 counties. Nearly 60 percent of the apartments (1,210 units) will be designated for families, and 868 will house elderly residents. To give disabled citizens access, at least 10 percent of the apartments will be marketed through organizations that serve persons with physical, mental and developmental disabilities.
Nearly $5.7 million of the tax credits will be used in conjunction with federal Hope VI funds for eight developments to revitalize run-down public housing neighborhoods in Charlotte, Durham, Greensboro and Wilmington. Since the Hope VI program began, the N.C. Housing Finance Agency has used federal and state housing credits to help gain $300 million in additional federal dollars for seven North Carolina cities.
“By drawing more federal funding into the state, we are not only able to improve housing opportunities for lower income families but can have a lasting impact on whole communities,” said Lucius S. Jones, chairman of the N.C. Housing Finance Agency.
In addition to the federal tax credits, the new rental housing will receive $11 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 reduce the rents required in urban counties.
“State tax credits help make rents more affordable and create new housing opportunities for working families and elderly people across the state,” said Jones.
This year, more than 60 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 1,323 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 income needed by a family of four from $42,960 a year to $35,800. 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 $23,550 a year, rather than $28,260.
Thirty-one of the developments were selected from 69 applicants this year. The eight Hope VI developments were awarded 2006 tax credits as forward commitments last year to strengthen their applications for other federal funds.
Under the selection process, the N.C. Housing Finance Agency evaluates the properties 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. The evaluation consists of 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 43,700 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 nearly 170,000 affordable homes and apartments statewide.
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