$2.25 Billion at Work to Jumpstart Affordable Housing Construction
HUD Secretary Shaun Donovan announced that HUD is approving the final round of plans submitted by state housing finance agencies totaling over a billion dollars to jumpstart affordable housing programs in 26 states that had been stalled due to the economic recession. This brings the total amount of funding now at work under this program to $2.25 billion in all 50 states, the District of Columbia, and Puerto Rico.
Funded through the American Recovery and Reinvestment Act of 2009, HUD’s Tax Credit Assistance Program (TCAP) allows state housing finance agencies to resume funding of affordable rental housing projects, while stimulating job creation in the hard-hit construction industry.
One of the by-products of this recession has been the freezing of investments in the low-income housing tax credit (LIHTC) market. Since the contraction of the credit market, and as traditional investors remain on the sidelines, the value of tax credits has plummeted. Consequently, as many as 1,000 projects, containing nearly 150,000 units of housing, are stalled across the country.
In response, the Recovery Act provides $2.25 billion for TCAP, a grant program to provide capital investments in these stalled LIHTC developments. Since a major purpose of this program is job creation, the Recovery Act establishes ambitious deadlines to spend the grant funds and requires state housing credit agencies to give priority to projects that can begin immediately and be completed by February 16, 2012.
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