Affordable housing projects planned or in construction across the country saw their financing threatened when the recession killed the market for low-income housing tax credits, which are the nation’s main funding method for low-income housing development. Now, federal economic stimulus money is rolling in to help bridge that gap. U.S. Housing and Urban Development Secretary Shaun Donovan last week released $2.25 billion in stimulus money to “jump start” as many as 1,000 stalled affordable housing projects across the nation. Washington got $43 million, and Idaho got $8.75 million.
“It’s significant funding,” said Bob Peterson, tax credit manager for the Washington Housing and Finance Commission. “Investment has dropped off in Washington state.” Developers of low-income housing typically sell the federal tax credits to help finance their developments. But as the housing market dropped in the past two years, the value of the credits plummeted. Peterson said two years ago, investors routinely were paying 95 cents on the dollar for the credits; now it’s down to as low as 65 cents. The economic stimulus money will come in the form of grants to close that gap; both Idaho’s and Washington’s housing finance agencies are now reviewing competitive applications for the money, with decisions due within the next one to two months. Though an Idaho Housing and Finance Association spokeswoman said IHFA doesn’t know how many projects are stalled in Idaho, Washington has identified at least 10, and a joint effort by four Spokane churches to provide more affordable housing in that city could be among the projects to benefit from the new funds. You can read my full story here in today’s Spokesman-Review.