2B — February 28 - March 12, 2020 — Owners, Developers & Managers — M id A tlantic Real Estate Journal


O wners , D evelopers & M anagers Murphy administration awards +$22M in tax credits NJHMFAcreates apartments for New Jersey families T with a total development cost of $1.45 billion.

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Owners, Developers &Managers Since the inception of the LIHTC program, more than 59,000 apartments have been created in New Jersey. No direct funding comes from the New Jersey Treasury for the LIHTC program.  existing apartments. Typi- cally, the tax credits are sold to investors who then provide private equity to fund con- struction. In return, the inves- tors 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. This additional capi- tal lessens a developer’s debt burden and allows the project to carry a smaller mortgage. Consequently, rents will be more affordable to low- and moderate- income residents who qualify.

RENTON , NJ — Opening the door to over 1,200 new apart- ments affordable for families, seniors and residents with special needs, the Murphy Ad- ministration has awarded over $22 million in annual 9% fed- eral Low Income Housing Tax Credits (LIHTC). The highly competitive tax credits are expected to generate $214.7 million in private investment to create 17 developments totaling nearly $325 million to help build a stronger New Jersey. The 2019 awards, adminis- tered under the New Jersey Housing and Mortgage Fi- nance Agency’s (NJHMFA) new, innovative guidelines, will create apartments for families in Closter, veterans in East Greenwich and seniors in Branchburg, among other projects. The new guidelines place greater emphasis on locating housing in areas pro- viding children access to good school systems; creating on- site services, such as nurses and health-related programs, in senior housing to enable them to remain in their com- munity; and renew emphasis on mixed-income development to avoid segregating low- and moderate-income housing. The LIHTC program, which was established by the Tax Reform Act of 1986, is the most prolific source of fund- ing for new affordable rental apartments for residents. Under this administration to date, NJHMFA has financed or awarded tax credits toward the creation or rehabilitation of over 6,400 affordable apart- ments across the state, includ- ing more than 330 special needs beds, and an additional 440 market-rate apartments

“Low Income Housing Tax Credits make it financially possible to build and reha- bilitate affordable housing for residents in New Jersey, which is why it is such a criti- cal federal program,” said Lt. Governor Sheila Oliver, who serves as Commissioner of the Department of Community Affairs and NJHMFA board chair. “Governor Murphy and I remain committed to the production of safe, decent and affordable housing through the LIHTC program and New Jersey’s Affordable Housing Trust Fund – these are the engines that help drive our mission to ensure that every- one has a place to call home.” One of the most effective fea- tures of the LIHTC program is each state’s ability to craft its own allocation plan and define the criteria for awarding tax credits. New Jersey has one of the country’s most innovative LIHTC programs. “The new policy changes that have guided this year's awards continue to boost hous- ing in areas of high oppor- tunity and to deconcentrate poverty, making housing more affordable and accessible to all,” said NJHMFA executive director Charles Richman . “These awards will support affordable rental homes in suburban, rural and urban areas, with access to good schools, supportive services for seniors and veterans, and provide for income diversity to build stronger communities.” How the LIHTC program keeps housing affordable Under the LIHTC program, federal tax credits are award- ed to developers to build new apartments or rehabilitate


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