November 5, 2004

LANSING - A total of 552 units of affordable rental housing will be built or renovated for low- and moderate-income Michigan families, the elderly, people with disabilities, and those at risk of homelessness as a result of over $6 million in federal Low Income Housing Tax Credits approved by the Michigan State Housing Development Authority (MSHDA), the agency announced today.

“The Housing Credit has proved extremely successful in encouraging private investment in affordable housing,” MSHDA acting executive director Rick L. Laber said. “Literally thousands of lower income families and senior citizens will benefit from the housing tax credit program. In addition, these credits will also provide housing for the disabled and those at risk of homelessness.”

Laber said that the entire $6,281,599 total was awarded in distressed areas and rural communities throughout the state.
In addition, a portion of the total award will provide units of rental housing for disabled Michigan residents as well as those individuals and families at risk of homelessness.

“The need for housing credits remains high in Michigan while the federally funded dollars needed to provide the housing is shrinking,” Laber said. “As a rule, we are only able to fund about one request for every three we receive.”

According to Laber, the LIHTC program also plays a key role in bolstering the state’s economy through job creation. This round of housing credit awards will generate more than 1,160 year long jobs in construction and related trades.

Established by Congress in the 1986 Tax Reform Act, the aim of the Housing Credit is to stimulate private investment in affordable rental housing and thus to expand and preserve the nation’s affordable housing stock.

“One thing to remember is that for each dollar of tax credit awarded, more than 10 times that amount is represented in total rental development costs,” Laber said. “The housing credit program is extremely successful in providing housing opportunities for the state’s low and very low income residents.”

Owners and investors in low income housing may apply to receive a tax credit against their federal tax liability if the rental housing has at least 20 percent of its units for households with incomes at or below 50 percent of the area median, or 40 percent of its units reserved for households with incomes at or below 60 percent of the area median.

The amount of the credit is based on a percentage of certain costs to renovate or develop housing that will be income-and rent-restricted for at least 18 years.

Developers can sell the credit to raise equity for their projects, thus reducing the necessary mortgage financing and making possible lower rents for tenants.

For more information, contact MSHDA’s Low Income Housing Tax Credit program, 735 East Michigan Avenue, Lansing, MI 48912; (517) 373-6007.

2004 Low Income Housing Tax Credit Projects

######