Murphy Administration Awards $22 Million in Federal Tax Credits to Expand Affordable Housing for Families, Seniors, Special Needs Residents
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- Developments Would Provide More Than 1,200 Housing Opportunities in 10 Counties
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Opening the door to over 1,200 new apartments affordable for families, seniors and residents with special needs, the
The 2019 awards, administered under the
The LIHTC program, which was established by the Tax Reform Act of 1986, is the most prolific source of funding for new affordable rental apartments for residents. Under this administration to date, NJHMFA has financed or awarded tax credits toward the creation or rehabilitation of over 6,400 affordable apartments across the state, including more than 330 special needs beds, and an additional 440 market-rate apartments with a total development cost of
"Low Income Housing Tax Credits make it financially possible to build and rehabilitate affordable housing for residents in
One of the most effective features of the LIHTC program is each state's ability to craft its own allocation plan and define the criteria for awarding tax credits.
"The new policy changes that have guided this year's awards continue to boost housing in areas of high opportunity and to deconcentrate poverty, making housing more affordable and accessible to all," said NJHMFA Executive Director
How the LIHTC program keeps housing affordable
Under the LIHTC program, federal tax credits are awarded to developers to build new apartments or rehabilitate existing apartments. Typically, the tax credits are sold to investors who then provide private equity to fund construction. In return, the investors receive a dollar-for-dollar reduction on their federal tax returns for a period of 10 years. The equity generated from the sale of the tax credits can fund approximately 70% of a project. This additional capital lessens a developer's debt burden and allows the project to carry a smaller mortgage. Consequently, rents will be more affordable to low- and moderate- income residents who qualify.
Since the inception of the LIHTC program, more than 59,000 apartments have been created in
For more information on NJHMFA programs, visit www.njhousing.gov.
Please see the following charts for additional information on the projects awarded tax credits in the 2019 round.
To view the tables click here (https://www.njhousing.gov/dca/hmfa/media/news/2019/approved/20191223.html)
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