Tax-Exempt Bonds: For-Profit Ownership
Eligible Projects
Residential rental projects located
in Washington State with
Amount Financed
The state limits the maximum level of
tax-exempt Multifamily Bonds the Commission can issue in a given year
for multifamily developers. Therefore, developers must apply for an
allocation of Bond Cap before bonds can be issued. The
application process can be competitive if requests for Bond Cap are
greater than supply.
Activities Financed
Type of Facilities Financed
Developers may use the proceeds from
tax-exempt bonds to develop
-
Independent living units (apartments)
-
Congregate care facilities
-
Assisted living facilities
Regulatory Requirements
Internal Revenue Code requires users
of tax-exempt Multifamily Bonds to reserve a percentage of the total
units financed for low-income residents. The minimum requirement under
the Code is either 20% of the total units set aside for households with
incomes at or below 50% of median income; OR 40% of the units set aside
for households with incomes at or below 60% of median income.
Maximum Household Income Required to Qualify Tenants
Low Income
Housing Tax Credits (LIHTCs) combined with Tax-Exempt Multifamily Bonds
If
more than 50% of a project is financed with tax-exempt Multifamily
Bonds, the project may access the 4% Low Income Housing Tax Credit
without competing for an allocation of LIHTCs. Projects must submit a
separate LIHTC application and score a minimum of 50 points on the
Qualified Allocation Plan. Using bonds with tax credits, allows
developers to combine low interest rates on long term debt with a
substantial equity contribution from an allocation of LIHTCs.
While LIHTCs cannot be used with 501(c)(3) bonds, nonprofit developers
can access LIHTCs by forming a partnership
with a for-profit tax credit investor and applying for Multifamily
Bonds.
4% Tax Credits with Tax-Exempt Bonds
Application
Multifamily Housing Program Application
This page was
modified on 05/04/2007. |
