GOVERNOR ANNOUCNES APPROVAL OF $9.8 MILLION IN LOW INCOME HOUSING TAX CREDITS TO ASSIST MICHIGAN’S LOW TO MODERATE-INCOME RESIDENTS

LANSING – Governor Jennifer M. Granholm today announced that over 1,000 units of affordable rental housing will be built or renovated for low to moderate-income Michigan families, the elderly, people with disabilities and those at risk of homelessness as a result of $9.8 million in federal Low Income Housing Tax Credits (LIHTC) approved by the Michigan State Housing Development Authority (MSHDA).

“Affordable housing helps is an essential component of a thriving community,” said Granholm. “Michigan residents deserve the opportunity to have a safe, affordable and secure place for their families to live and thrive.”

MSHDA Executive Director Michael R. DeVos said a portion of the total award would provide units of rental housing for disabled Michigan residents as well as those individuals and families at risk of homelessness.

“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,” DeVos said. “The housing tax credit program is extremely successful in providing housing opportunities for the state’s low and very low income residents.”

Over 40 percent of the units created through this award are going to be in distressed areas. This accounts for $5.4 million going into areas that are already suffering from severe economic strain and high poverty levels.

“Established by Congress in the 1986 Tax Reform Act, the aim of the Housing Tax Credit is to stimulate private investment in affordable rental housing and thus expand and preserve the nation’s affordable housing stock,” DeVos said. “The fact that the Authority can assist Michigan in preserving affordable housing is very rewarding.”

According to DeVos, the LIHTC program also plays a key role in bolstering the state’s economy through job creation. This round of housing tax credit awards will generate more than 100 yearlong jobs in construction and related trades.

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.

These tax credits will help to create more than 1,500 jobs across the state through new construction and new development projects.

The 2006 Low Income Housing Tax Credit Projects are:

For more information, contact MSHDA’s Low Income Housing Tax Credit program, 735 East Michigan Avenue, Lansing, MI 48912; (517) 373-6007. Or visit the Web site at www.michigan.gov/mshda.

MSHDA is a quasi-state agency that provides financial and technical assistance through public and private partnerships to create and preserve safe and decent affordable housing, engage in community economic development activities, and address homeless issues. MSHDA’s loans and operating expenses are financed through the sale of tax-exempt and taxable bonds and notes to private investors, not from state tax revenues. For more information on MSHDA programs and initiatives, visit the Web site at www.michigan.gov/mshda.

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