Grant approved for affordable housing

The Indiana Housing Finance Authority and its chairwoman, Lt. Gov. Katherine Davis, approved $69 million in awards for affordable rental housing Oct. 23. The $69 million will be used to create an incentive for developers to build affordable housing for so low-income families. \nThis congressional-approved federal program has been intact since 1986 and was established by the Internal Revenue Service. Lt. Gov. Davis said it provides a break on the liability of federal tax to the recipient of the award. Rental Housing Tax Credits are federal tax credits that IHFA allocates under a competitive process to developers of affordable rental housing. The developers that are awarded the tax credit can sell them to larger corporations who can then use it to reduce their federal tax liability. \nToby Strout, executive director of the Middle Way House in Bloomington, said it sold its tax credit for cash and that cash was was used to building more housing.\n"We received tax credits and we sold them to Lehman Capital Investment Corporation who in turn sold them to Fifth Third Bank," Strout said. "The program made it possible for Middle Way to construct 28 units of transitional housing for poor and very poor homeless families headed by single women whose lives were adversely effected by domestic violence."\nOnce a business sells its tax credit there are certain benchmarks on a timeline that must be met in order to retain the benefits. The tax credit buyer and the entity that sold the tax credit must maintain a relationship for 15 years. Lt. Gov. Davis said once the tax credits are awarded the developers have two years to develop the property.\nJennifer Boehm of the Indiana Housing Finance Authority said the tax credits will have a huge impact. The credits are going to help in the financing of 947 units of affordable rental housing.\nThese awards are important to Indiana residents who need this type of housing, Davis said. \n"These units will help to address the need for safe, decent and affordable housing for Hoosier families in communities across the state."\nStrout said selling their tax credits and other contributors giving money were crucial to their new housing units.\n"Last year they housed 42 families representing 134 women and children," Strout said. "We have already celebrated the fifth anniversary of the building."\n-- Contact staff writer Mike Malik at mjmalik@indiana.edu.