LANSING, MI - The Michigan State Housing Development Authority (MSHDA) announced that nearly 700 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 $9.6 million in federal Low Income Housing Tax Credits (LIHTC) approved by MSHDA. The tax credits also will help bolster the state's economy by creating approximately 1,600 jobs in construction and related trades.
"These tax credits will leverage millions of dollars in investment necessary to develop thriving and vibrant communities around the state, creating jobs and providing affordable housing," said MSHDA Executive Director Gary Heidel. "In this time of economic challenge, we must do all that we can to stimulate the economy and help Michigan citizens who are struggling."
Heidel 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.
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 the percentage of certain costs to renovate or develop housing that will be income- and rent-restricted for a minimum of 30 years.
Developers can sell the credit to raise equity for their projects, reducing the necessary mortgage financing for the developer and making rents lower for tenants. The tax credits awarded in this round cover a period of 10 years, totaling just under $1 billion. In turn, the award will attract other entrepreneurial development in the recipient communities, leveraging millions more in investment revenues and resources.
The Michigan State Housing Development Authority (MSHDA) provides financial and technical assistance through public and private partnerships to create and preserve decent, affordable housing for low- and moderate-income residents and to engage in community economic development activities to revitalize urban and rural communities.
*MSHDA's loans and operating expenses are financed through the sale of tax-exempt and taxable bonds as well as notes to private investors, not from state tax revenues. Proceeds are loaned at below-market interest rates to developers of rental housing, and help fund mortgages and home improvement loans. MSHDA also administers several federal housing programs.