4% As of Right Low Income Housing Tax Credits (LIHTCs)
Type
Capital
Source
State
Procurement Agency
New York State Homes and Community Renewal (HCR)
Total Annual Award
Because credits are as of right and the state bond volume cap is high, this is a deep pool of funding, with over $900 million available on an annual basis.
Eligible Populations
May serve any low income sub-population.
Eligible Projects
All types of housing projects are eligible. 4% credits are only available for units up to 60% of the area median income (AMI).
Funding Award Details
Within HCR, HFA is authorized to allocate 4% “as of right” credits to projects financed by Private Activity Bonds issued by other State agencies such as Industrial Development Agencies and Public Housing Authorities and maintains a separate application process for projects which only require the allocation of 4%, "as of right" LIHTC.
4% “as of right” credits are available year-round through an open application process.
There are no per-unit limits on the 4% “as of right” credits and the state bonding authority is only limited by a bond volume cap, which is rarely reached. Annually, HFA funds about $900 million in affordable housing statewide.
Credits may only be used in conjunction with taxable bond financing or conventional financing.
Rate Details
4% deals generate lower amounts of equity than 9% deals. While there is no cap on the amount requested, per-unit costs must be in line with typical local rate structures.
Term of Service/Length of Grant
15 years.
Limitations
Most funding goes to preserve existing affordable housing. The Qualified Allocation Plan (QAP) lists projects that "address the shelter, housing, and service needs of the homeless poor and others with special needs" as a priority, elevating supportive housing as a priority area. 4% credits may not be blended with 9% credits.
Network Notes
Overall, HFA continues to increase its commitment to funding supportive housing. Prior to 2007, HFA financed no supportive housing projects; since then, the agency has financed 832 units including a record high of 445 in 2009 and 387 in 2010.
In 2009, HFA worked closely with other state agencies, including the Office of Housing and Community Renewal (HCR), Office of Mental Health (OMH), Office of Temporary & Disability Assistance (OTDA) and Office of Alcoholism and Substance Abuse Services (OASAS) and utilized $63.9 million in tax-exempt bond financing and an additional $4 million in subsidies from their corporate products to bring six supportive housing projects to fruition.
4% credits are “as of right” or not competitive, so they can be a more reliable source than the 9% credits. Also, in some situations, 4% can actually yield more credits and equity than the 9% program, because the State’s 9% credits are capped per project, and 4% are not.
New in 2011: HFA also has a joint application process with HCR to include Homes for Working Families funding as a gap-filler for projects. Supportive housing is a priority for this funding.
NYC developers can access additional 4% As of Right tax credits. For more information on the LAMP program, read the Network's Funding Guide entry here.
For More Information
See HCR's website.
Contact
Leonard Gruenfeld
Senior Underwriter
New York State Homes & Community Renewal
212-872-0386
LGruenfeld@nyshcr.org
Last updated: 09/15/2011
Did you know…
New York City nonprofits invented supportive housing in the early 1980s.