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Credits to help finance construction or rehabilitation of 64 affordable housing developments; allocation could have estimated $434.6 million impact on state

(AUSTIN) — The Texas Department of Housing and Community Affairs (“TDHCA”) has allocated $63.5 million in tax credits to private developers competing in the 2015 Housing Tax Credit Program. Because the credits may be used over a 10-year period, these awards will generate close to $635 million in equity financing for 64 affordable rental properties.

This financing will help fund the construction or rehabilitation of 5,502 privately-owned rental units across the state serving households earning up to 60 percent of the area median family income.

“Housing tax credits continue to be the state's most powerful resource for providing Texans greater options when deciding where to live,” said TDHCA Executive Director Tim Irvine. “Having access to housing that is both affordable and in the neighborhood of choice is essential in meeting the needs of all Texas residents and to accomplish this, the state must maintain and enhance its rental housing stock. Today’s credit allocation will help us as we work to achieve this mission.”

The federal Housing Tax Credit Program is the state's primary means of directing private capital toward the development of affordable rental housing. Investors purchase credits allocated to developers which they use to offset a portion of their tax liability on a dollar-for-dollar basis in exchange for their investment in the property.

Developers use proceeds from the sale as financing for their property. The credits announced today are designed to cover approximately 70 percent of each property’s eligible development costs, allowing developers to build attractive, quality housing that can offer tenants a reduced rent. 

Besides expanding housing options for low-income individuals and families, Irvine noted that the combined construction payroll salaries, local purchases, and taxes and fees the program generates could have as much as a $434.6 million impact on the Texas economy.