California Awards More than $146 Million in Federal and State Housing Tax Credits
California State Treasurer Bill Lockyer announced that his state has awarded $146.9 million in tax credits to affordable housing projects, which will create more than 4,862 units for low-income households. The state also awarded $49 million in federal stimulus money to affordable housing projects.
The California Tax Credit Allocation Committee, chaired by Lockyer, approved the tax credits—both state and federal—and stimulus money awards. The tax credits will be used to construct or rehabilitate low-income housing. Developers will be able to use the credits to attract the investment capital needed to help finance the projects.
The stimulus money can be used in place of previously awarded tax credits, which project developers say they have found difficulty selling during the market slump. Provisions in the American Recovery and Reinvestment Act (ARRA) of 2009 allow prior and current tax credit recipients to exchange those credits for cash at 85 cents for each $1 of tax credit. While credits generally are distributed annually over 10 years, the exchange funds will be awarded in a lump sum. According to Lockyer, developers could have cash in hand in as few as 60 days.
Projects awarded the tax credits when this announcement was made will be eligible to apply for ARRA exchange funds at the state’s next allocation committee meeting in December if they are unable to sell the credits or attract the necessary amount of equity from them.
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