NJHMFA Opens 2020 Competition for Federal 9% Low Income Housing Tax Credits
The agency estimates the tax credit awards will generate approximately $230 million in private equity that will create about 1,200 affordable rental apartments in the Garden State.
TRENTON, NJ—The New Jersey Housing and Mortgage Finance Agency reports it has opened a competition for the award of $24 million in highly competitive federal 9% Low Income Housing Tax Credits for 2020.
The agency estimates the tax credit awards will generate approximately $230 million in private equity that will create about 1,200 affordable rental apartments in the Garden State.
The application deadline for 9% LIHTC for family, senior and special needs proposals is noon, July 22, with awards expected to be announced in November. Non-competitive applications for mixed-income projects will be accepted on a rolling basis from April 2 until noon, July 22.
NJHMFA, which administers the program, currently monitors more than 700 tax credit developments of nearly 60,000 apartments statewide. No direct funding comes from the New Jersey Treasury for the LIHTC program.
“Low Income Housing Tax Credits are instrumental in our ability to create affordable housing opportunities throughout New Jersey. We are guided by our efforts to deconcentrate poverty, incentivize investment in Opportunity Zones, expand opportunities for seniors and veterans, and provide housing for our most vulnerable residents,” says NJHMFA executive director Charles A. Richman. “These tax credits can also fund mixed-income developments which increase housing and income diversity in our communities.”
Under the LIHTC program, federal tax credits are awarded to developers to build new apartments or rehabilitate existing apartments. Typically, the tax credits are sold to investors who then provide private equity to fund construction. In return, the investors receive a dollar-for-dollar reduction on their federal tax returns for a period of 10 years.
The equity generated from the sale of the tax credits can fund approximately 70% of a project. Under the administration of Gov. Phil Murphy, tax credit awards totaling more than $50 million have been awarded to 39 developments providing for about 2,600 apartments. The state estimates those awards have reaped a total of nearly $804 million in development investment in New Jersey.