MULTIFAMILY HOUSING BONDS
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Tax-Exempt Bonds:
For-Profit Ownership
Eligible Projects
Residential rental projects located in Washington State with:
5 or more units
Complete and separate kitchen and bathing facilities in each unit
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
New construction
Acquisition with rehabilitation
Predevelopment costs
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 Credit (LIHTC) 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
01/25/2010