ADFA Program Description

MULTI-FAMILY HOUSING

LOW-INCOME HOUSING TAX CREDIT PROGRAM

The 1986 Tax Reform Act instituted the Low-Income Housing Tax Credit Program for owners and developers of low-income rental housing to provide an incentive for non-profit and profit motivated organizations to provide and develop housing for low-income persons and families.

In 1995, ADFA initiated steps to revitalize the Multi-Family Tax-Exempt Private Activity Volume Cap Bond Program. By utilizing tax-exempt bond financing, additional tax credits may be issued to develop housing in Arkansas.

Arkansas receives an allocation of approximately $5 million in Low-Income Housing Tax Credits per year. This does not include tax credit projects utilizing tax-exempt bond financing.

PROGRAM GUIDELINES

Tax Credits may be provided to owners of residential rental projects providing low-income housing units. The credits are taken annually for a term of ten years beginning with the tax year in which the project is placed in service or the following year.
The maximum allowable annual credits are computed so that the annual credits equals approximately 9% of the total project development costs minus the land cost. Projects must be conventionally financed and reserved for low-income residents of newly constructed or substantially rehabilitated projects
Tax Credits equal to approximately 4% of the total project cost minus land cost is available for new construction or substantial rehabilitation projects financed with tax-exempt bond financing and or other Federal funds.
Acquisition of an existing project is also eligible for tax credits equal to approximately 4% of the total project costs minus land cost if the rehabilitation of each unit exceeds $15,000. Acquisition of an existing project is only eligible if it has not changed ownership in the past 10-years.
All projects receiving tax credits must comply with income and rent limitations for a minimum of 30 years.

For more information about the low-income housing tax credit program call Bruce Bokony, multi-family housing manager at 501-682-5927 or e-mail him at bbokony@adfa.state.ar.us .