Iowa Disaster Housing Tax Credits Awarded

Iowa Governor Culver Announces More Than $10 Million In Disaster Housing Tax Credits; Housing tax credits aid counties impacted by natural disasters of 2008

June 10, 2009 -- DES MOINES – Today, Iowa Governor Chet Culver announced that the state is awarding $10,615,880 million in federal Housing Tax Credits to projects in Cedar Rapids, Dubuque and Des Moines. The Housing Tax Credits will provide financing for the creation and rehabilitation of 142 units of affordable housing in areas impacted by the natural disasters of 2008. The awards were made with a special allocation of Housing Tax Credits that Iowa received in response to the natural disasters of 2008.

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“Today’s awards of these Housing Tax Credits will insure over 100 Iowans have safe, decent and affordable homes,” said Governor Culver. “Housing Tax Credits are vital to our state’s recovery and renewal process. Apartments financed with Housing Tax Credits improve and stabilize Iowa’s disaster-impacted communities by helping families with affordable, quality housing.”

The Iowa Finance Authority (IFA) has administered the federal Housing Tax Credit program since its inception in 1986. Iowa received an additional allocation of Housing Tax Credits when Congress passed the Title VII Heartland Disaster Relief Act in October 2008. These credits total more than $600 million, and are in addition to the $60 million in credits Iowa receives annually. The disaster tax credits are available through 2010. Projects in counties that were declared Presidential Disaster Areas are eligible to receive tax credits from the special allocation. IFA accepts applications for Housing Tax Credits on an ongoing basis.

Projects receiving credits:

Applewood 111, Dubuque

* 3225 Pennsylvania Avenue
* 42 units of housing for older persons
* New construction
* Tax credit award: $6,146,380
* Developer: Horizon Development Group, Inc., 608-848-4500

MLK Brickstone, Des Moines

* 1039 &1045 19th Street; 1032 & 1036 18th Street
* 18 units of family housing
* New construction
* Tax credit award: $3,664,470
* Developer: Hatch Development Group, 515-243-4675

The Roosevelt, Cedar Rapids

* 200 1st Avenue NE
* 82 units of family housing
* Rehabilitation
* Tax Credit Award: $804,750
* This award is an increase to the original allocation of $5,985,250 awarded to the project in 2008 for a total tax credit allocation of $6,790,000. The additional credits were granted due to a significant increase in construction costs.
* Developer: Sherman Associates, Inc., 515-491-5103

Developers who receive tax credits sell them to corporate investors to generate equity for the housing developments. The tax credits provide a dollar-for-dollar reduction to the investor’s federal tax liability on ordinary income. Most investors realize a double-digit return on their tax credit investment.

For more information on Iowa’s Housing Tax Credit program, including investor information, visit www.IowaFinanceAuthority.gov.

Source: Iowa Governor Chet Culver