WASHINGTON, DC – July 28, 2009 – (RealEstateRama) — Today, Congressman Mike Michaud announced that Maine will receive $10,690,750 in funding for affordable housing. Funded through the American Recovery and Reinvestment Act (H.R. 1), U.S. Housing and Urban Development’s (HUD) new Tax Credit Assistance Program (TCAP) allows state housing finance agencies to resume funding of affordable rental housing projects across the nation while stimulating job creation in the hard-hit construction industry.
“This funding will create affordable housing opportunities when Mainers need it most,” said Michaud. “This funding will also help create new construction and non-construction jobs. With the overall decrease in housing construction, our country has experienced severe job loses in the building and trades sector. At the same time, we have seen the demand for affordable housing increase. This funding represents an important investment in our state and will help address both of these challenges.”
According to HUD, one of the by-products of the recession has been the freezing of investments in the low income housing tax credit (LIHTC) market. The tax credits create an incentive for investors to provide capital to developers to build multi-family rental housing for moderate- and low-income families across the nation. 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. HUD is awarding TCAP grants by formula to state housing credit agencies to complete construction of qualified housing projects that will ultimately provide affordable housing to an estimated 35,000 households nationwide. 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.