11-14-1988 Council Packet - Laserfiche WebLink

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OPPORTUNITIES FOR LOW INCOME HOUSING • Federal support for low income housing has been reduced, b0t the lax Reform Apt of 1986 provided an innovative and seemingly generous three-year program of tax credits for owners and investors. In 1987 the credit was 4% for acquisition; 9% for rehabilitation and new construction, but only 4% if a project used other federal subsidies or tax-exempt financing. Credits i-i 1988 and 1989 are based on a monthly prevailing interest rate formula that calculates present value credits of either 30% or 70% of qualified devslopment costs over ten years. Low income families and the community benefit when the owners, whether profit or non-profit, sell tax credits to limited partners who contribute equity, which reduces the amount of other financing, adds to the income stream, reduces the rent, and makes local projects feasible. Twenty percent of a project's units must be occupied by households with incomes under 50% of area median income, or 40% of the units must be occupied by households with incomes under 60% of area median income. The gross rent including utilities must not exceed 30% of the maximum income level for the particular size of household. If you have any questions on how this may work in your community, please give us a call. Michael Grossman 3654g 0