Federal and state Housing Tax Credit programs |
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Federal Low Income Housing Tax Credits (LIHTC) brings substantial equity investment into Vermont's housing market. In calendar year 2006, Vermont received federal Tax Credit authority to allocate $2.3 million ("Allocated Credits"). Since the inception of the program in 1987, VHFA has awarded approximately $26.2 million in federal allocated tax credits to developers of over 4,153 units of affordable rental housing that have been built or acquired and rehabilitated through private sector equity investments. The equity this generated for affordable housing developments is estimated at $233million dollars. VHFA also administers Federal Bond Credits which are similar to the Allocated Credits noted above, but which provide a lower level of credits and therefore lower equity investment to the project. The Bond Credits are automatically provided to eligible projects in conjunction with Private Activity Tax Exempt Bond Financing. VHFA has awarded $ 5million in Bond credits, generating approximately $44 million in equity. Additionally, the State of Vermont made available $300,000 in State Housing Tax Credits for FY2007. The allocation of both federal and state credits is highly competitive and continues to be oversubscribed in each allocation round. The combined effect of the State and Federal tax credit programs was private equity investment of nearly $ 41 million dollars in the past fiscal year alone that has been used to acquire, rehabilitate and/construct affordable housing units. VHFA’s responsibilities for administering the Tax Credit program include:
As with debt financed projects, those financed with Tax Credit Equity require an extensive level of underwriting analysis. |
