In Michigan, low-to-moderate income families will get better housing opportunities thanks to a new tax credit initiative. The ""Michigan State Housing Development Authority"":www.michigan.gov/mshda (MSHDA) recently announced that the $9.6 million in federal ""Low Income Housing Tax Credits"":www.hud.gov/offices/cpd/affordablehousing/training/web/.../basics/ (LIHTC) will go toward renovating affordable rental housing for the state's lower income and at-risk residents.[IMAGE]
In addition to those with low-to-moderate income, the tax credit funds will target the provision of real estate options for the elderly, those with disabilities, and those considered at risk of homelessness. The tax credits are also giving Michigan's economy a boost by creating an estimated 1,600 new jobs in construction and similar trades.
Companies and individuals who own or invest in low-income housing can now apply for a tax credit against their federal tax liability if the rental homes in question have at least 20 percent of included units available for households with incomes at or below 50 percent of the area's median income. Rental[COLUMN_BREAK]
properties with 40 percent of units reserved for households with incomes at or below 60 percent of the area's median income are also eligible for the tax credit.
The specific amount of the tax credit that can be applied is based on the percentage of costs associated with the renovation and development of housing that will remain income and rent-restricted for a minimum of 30 years, and the current program awards tax credits for a period of 10 years. Through the initiative, developers are able to sell the credit to gain equity for projects, thereby mitigating mortgage financing needs for the developer and keeping lower rent values for tenants.
Speaking out on the state's tax credit maneuver, MSHDA's executive director, Gary Heidel, said, ""These tax credits will leverage millions of dollars in investment necessary to develop thriving and vibrant communities around the state, creating jobs and providing affordable housing. In this time of economic challenge, we must do all that we can to stimulate the economy and help Michigan citizens who are struggling.""
Michigan hopes that the tax credit will help bring in additional entrepreneurial developments. The state is seeking to leverage millions in investment revenues and resources through growth in the applicable communities through the gains possible from such projects.
The MSHDA serves as the state's key provider of financial and technical assistance through public and private partnerships, for the establishment and preservation of affordable housing that will help revitalize urban and rural regions. Loans and operating expenses for the MSHDA are financed via the sale of tax-exempt and taxable bonds and notes to private investors, instead of deriving money from state tax revenues.