Vilsack-Pederson Administration Announces More than $60 Million in Tax Credits to Build Affordable Housing in Iowa

Vilsack-Pederson Administration Announces More than $60 Million in Tax Credits to Build Affordable Housing in Iowa

DES MOINES - Today Governor Tom Vilsack and Lt. Governor Pederson marked the 20th anniversary of the Low-Income Housing Tax Credit (LIHTC) program by announcing more than $60 million in tax credits to developers of affordable housing. The Iowa Finance Authority administers the LIHTC program that has provided more than $770 million in equity to create housing for thousands of low-and moderate-income Iowans since 1986. Combined with other financing, the total value of these projects exceeds $1.5 billion.

"Affordable housing is a key component of making Iowa's communities great places to live, work and raise a family," Governor Vilsack said. "The developments that will receive tax credits will provide new or rehabilitated housing for hundreds of people in all parts of Iowa and in communities large and small. I'm proud that over the last 20 years the Iowa Finance Authority has partnered with a variety of developers to create opportunities for families to achieve the American dream."

The federal tax credits provide a dollar-for-dollar reduction to an investor's federal tax liability on ordinary income. Tax credits are sold to investors to generate equity for the housing developments. The Internal Revenue Service annually allocates $1.90 per person in credits to each state based on population. Iowa was eligible to distribute about $6.2 million in tax credits in 2006, but the actual awards exceed $60 million because the credits are committed annually for a 10-year period.

Congress established the LIHTC program as part of the 1986 Federal Tax Reform Act. President Clinton made the program permanent in 1993 by the Budget Reconciliation Act. In its 20-year history, the program has: *

Provided more than $770 million to help developers finance the construction or rehabilitation of affordable housing.
Assisted the construction or rehabilitation of 17,088 units of affordable housing in Iowa.
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Assisted the creation of affordable housing in 83 Iowa counties. (Projects in Guthrie and Decatur counties received tax credits in 2006, the first time projects in these counties have received credits.)
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Assisted 156 nonprofit and for-profit developers of affordable housing.
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Assisted the creation of various types of housing, including affordable assisted living that benefits elderly Iowans, service-enriched housing that benefits persons with disabilities, housing for families and more.

http://www.governor.state.ia.us/news/2006/march/march0106_2.html