GULFPORT, MS - The public-comment period has begun on a program that would offer $30 million in loans to developers awarded tax credits for construction of affordable housing in Hancock, Harrison, Jackson and Pearl River counties. Affordable Housing Gap Funding will provide loans for up to 13 tax-credit developments with a total of 1,102 units approved for the Mississippi Coast, said Scott Spivey of the Mississippi Home Corp., which administers the tax-credit program.
The Mississippi Development Authority announced the program because it is in charge of federal Community Development Block Grant money earmarked for Coast recovery and backing the loans.
Officials say the funding is needed because the value of tax credits, which developers sell to investors to raise money, has taken a downturn with the economy. Institutional investors who have posted losses have less need for the credits to lower their tax liability.
Spivey said the value of credits has decreased from an anticipated 92 cents on the dollar to 74 to 78 cents on the dollar.
"The reason this is important to the Gulf Coast is because GO Zone tax credits can't be reallocated," Spivey said. "If financing kills a project, the tax credits are lost."
The state had worked several months to combine the tax credits with disaster recovery funds, said Jon Mabry of MDA. Because CDBG money awarded to Mississippi will back the loans, HUD must approve the plan. HUD requires a 15-day public-comment period. The state will then submit the plan to HUD for approval, required within 30 days. MDA is already preparing to disburse loans pending final approval.
Source: SunHerald.com