WHEDA Awards $31.9 Million In Federal And State Housing Tax Credits
Awards advance affordable housing projects in 23 communities statewide
MADISON, WI – The award of $31.9 million in federal and state tax credits will advance housing opportunity and economic recovery in Wisconsin through creation of 2,039 affordable housing units in the months ahead, Gov. Tony Evers announced Tuesday.
The state and federal housing tax credit awards by the Wisconsin Housing and Economic Development Authority (WHEDA) support housing developments in 23 communities statewide and cap a highly competitive process that drew requests totaling $61 million.
“We have to connect the dots between housing security and economic development for our workforce to keeping kids in the classroom,” said Gov. Evers. “Ensuring folks across our state have access to affordable housing is critically important. These tax credits not only leverage private capital but support good-paying jobs and infrastructure in our local communities.”
WHEDA CEO Joaquín Altoro said WHEDA’s tax credit programs provide an economic boost in communities throughout Wisconsin. The 2020 projects range in size from a 32-unit affordable workforce housing development in Darlington to a 135-unit, family-focused project in Madison.
“The benefits of affordable housing and economic recovery extend statewide and WHEDA continues to innovate and adapt its programs to increase this positive impact,” Altoro said. “It’s important to emphasize that WHEDA is not able to accomplish this work alone. To get these developments off the ground, WHEDA relies on critical partnerships with developers, additional financing sources, local housing groups, community leaders and elected officials.”
Highlights of this year’s state and federal housing tax credit awards include:
- A total of $15,986,087 in federal 9% housing tax credits to fund 23 projects with 1,030 low- and moderate-income housing units.
- A total of $7,947,444 in state 4% housing tax credits to fund 11 projects with 1,009 low- and moderate-income housing units. The award of the state 4% credits triggers the availability of $7,958,843 in federal 4% tax credits for these projects.
- Support for housing in Darlington, Monroe, Bristol, Eau Claire, Wauwatosa, Milwaukee, Cuba City, New Richmond, Fall River, Wisconsin Dells, Mount Horeb, Ashwaubenon, Madison, Sparta, Port Washington, Barneveld, McFarland, Waunakee, Kenosha, Wausau, Sun Prairie, Fitchburg and Oshkosh.
The $15.9 million in federal 9% tax credits are worth some $143 million over the 10-year lifespan of the credits. The state 4% credits are worth some $33 million over a six-year lifespan and the federal 4% tax credits are worth some $72 million over a 10-year lifespan.
The tax credits are not housing subsidies. Rather, the credits provide tax incentives through the Internal Revenue Code that encourage developers to create qualified affordable housing. The developers then sell the credits to private investors to obtain funding. Once the housing project is available to tenants, investors can claim the tax credit as a dollar-for-dollar reduction of federal income taxes owed over a 10-year period.
In exchange for receiving the tax credits, developers agree to reserve a portion of their housing units for low- and moderate-income households for at least 30 years. Remaining units are rented at market rates to seniors and families without income limits.
Federal tax credits are allocated to the states based on population, making household participation in the 2020 Census vital for the state. WHEDA has been the sole administrator for federal housing tax credits in Wisconsin since the program began in 1986. WHEDA also administers the state program. Wisconsin Act 176 was signed into law in 2018 and created the state housing tax credit program that is used in conjunction with the existing federal housing tax credit program.
Tax credit developments must meet high design and operating standards. The scoring system for the awards is referred to as WHEDA’s Qualified Allocation Plan; it includes points for strong management, excellent development quality, demonstrated market need, availability of community services and amenities, proximity to economic opportunities and proper local zoning.
For more than 45 years, WHEDA has worked to provide low-cost financing for housing and small business development in Wisconsin. Since 1972, WHEDA has financed more than 75,000 affordable rental units, helped more than 133,000 families purchase a home and provided more than 29,000 small business and agricultural loan guarantees. WHEDA is a self-supporting public corporation that receives no tax dollars for its operations. For more information on WHEDA programs, visit wheda.com or call 800-334-6873.