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The space between affordable and market rate housing development can be a lonely one.  Affordable projects can participate in tax-credit, supplemental grants, and Section 8 housing assistance programs; market rate deals often generate sufficient income to support a simplified capital stack of debt and equity.  Middle-income, or workforce housing projects typically don’t qualify for tax-credits and don’t generate enough income to support a feasible amount of debt.  Where to go?   

Congress may have the answer; that is not a misprint!  The Workforce Housing Tax Credit Act, proposed bipartisan legislation, would mirror existing Low Income Housing Tax Credit (LIHTC) programs and authorize state housing agencies to allocate tax-credits for “middle-income” projects through a competitive process. 

To qualify for the credit, at least 60% of a project’s units must be occupied by individuals with incomes at 100% or less of the area median income (AMI), with rents restricted to 30% of the designated income.

Credits would be allocated in 2024 based on a state’s population beginning at $1.00 per capita with a minimum of $1,500,000 for small states.  The tax credits would be provided to developers over a 15-year period, with a 15-year compliance period and 30-year extended commitment. 

Projects can use a combination of low-income and workforce housing tax credits in a single project, as long as at least 20% of the total units are middle-income. 

Please contact us if you would like additional information about this exciting legislation.

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