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Margaret Matrone, NCHFA, 919-877-5606,
RALEIGH--North Carolina will gain $186 million in affordable rental housing 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. Four additional developments with 457 affordable apartments will be financed through the sale of $26 million of tax-exempt bonds.
The 51 developments financed with tax credits will provide 2,310 privately owned, affordable apartments in 32 counties. Of the total, 699 apartments will be designated for elderly residents, and 1,611 for families. For a list of properties that received funding, please click here
The developments will receive $14.8 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 $14.2 million of loans approved by the N.C. Housing Finance Agency’s board of directors, as well as state tax credits, under a program created by the General Assembly in 1999. The loans and state tax credits make it possible to build new apartments in rural counties where the median income is low, and to lower the rents in urban counties.
This year, 86 percent of the apartments will be affordable to North Carolinians whose incomes are lower than the federal 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 income needed by a family of four from $42,780 a year to $35,560. In Beaufort County, 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 almost a quarter of the apartments will be affordable for people whose incomes are lower still—40 percent of median or less.
“By creating the state tax credit, the General Assembly opened up 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 improved the geographic distribution of the apartments funded this year and has made the rents more affordable.”
The 51 developments were selected from an original field of 135 proposals, of which 91 completed 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 38,750 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 156,000 affordable homes and apartments statewide.
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