(AUSTIN) — The Texas Department of Housing and Community Affairs (TDHCA) has awarded a mix of housing tax credits and loans totaling $3 million to two private developers adding 140 rental units to the Rio Grande City area, the majority of which will offer reduced rents.

The awards, made through the state housing agency’s Housing Tax Credit and Multifamily Direct Loan Investment Partnerships (HOME) programs, will allow 130 of these units to be set aside for individuals and families earning no more than 60 percent of the area median family income. For Starr County, this equals an annual income of $31,440 for a four-person household.

TDHCA awarded a $1 million HOME loan and $500,000 in tax credits to construct the 60-unit La Esperanza Del Rio apartments near the intersection of FM 3167 and Eisenhower Road in the city’s extraterritorial jurisdiction. Fifty of the development’s 60 units will be set aside for income eligible tenants.

The Department also awarded $1 million in HOME loan funds and $586,271 in tax credits to construct the 80-unit Royal Gardens in Rio Grande City near the intersection of Eisenhower and Charco Blanco roads. All 80 units will be set aside for income eligible tenants.  

The tax credits, once sold to the developers’ respective private investment partners, are expected to generate a combined $9.5 million dollars in private equity financing for these two properties.

Because the state’s future population growth is expected to be the greatest at both ends of the age spectrum, an ample stock of affordable housing is critical to keeping the Texas economy healthy and vibrant, according to TDHCA Executive Director Tim Irvine. 

“The Housing Tax Credit Program plays a critical role in TDHCA’s mission to offer housing options for Texans of all income levels,” Irvine said. “Whether it is a young working family just starting out in life or a senior citizen living on a fixed income, thousands of Texans are in need of a safe, decent home that fits their limited budget. Both of these properties represent an important step toward filling that need.” 

Besides bringing greater stability to low income individuals and families, he noted the program’s economic multiplier effect ensures the entire community will benefit from today’s award.

“When you combine the jobs, payroll funds and sales tax revenue these properties generate,” Irvine explained, “TDHCA anticipates that these awards could generate as much as $11 million for the Rio Grande City economy and $1 million in taxes and fees for both city and state coffers."

The federal Housing Tax Credit Program is the state’s primary means of directing private capital toward the development of affordable rental housing. Developers and their investment partners use the credits to offset their federal tax liability on a dollar-for-dollar basis in exchange for the construction or rehabilitation of rental units offering a reduced rent.