CHARLOTTE, N.C. (April 26, 2021) — Charlotte City Council on Monday approved $25.8 million from the city’s
Housing Trust Fund (HTF) to help finance 14 multifamily, rental affordable housing developments.
The developments could add as many as 1,422 affordable rental units for families, seniors and people experiencing homelessness in Charlotte. Of those units, 357, or 25%, will be targeted to households earning up to 30% of the
Area Median Income (AMI). In Charlotte, a family of four would need a household income at or below $25,050 to qualify for affordable housing at the 30% AMI level.
The investment helps meet the city’s affordable housing goals by targeting low-to-moderate income households and providing high-quality, new-construction rental housing. The investment will also allow for the preservation of affordable housing in a high-opportunity area and provide supportive housing for people transitioning from homelessness.
The 14 developments were selected for meeting HTF criteria such as:
Developer experience in developing affordable, multifamily housing.
Ability to create mixed-income housing developments in areas of high opportunity.
Ability to leverage available resources, such as HTF funds from the city; the
Local Initiatives Support Corporation’s (LISC) Charlotte Housing Opportunity Investment Funds (CHOIF); public or private land; low-cost debt; project-based housing vouchers; and state and federal affordable housing financing.
Some of the developers submitted proposals that will entail securing Low-Income Housing Tax Credits (LIHTC) from the
North Carolina Housing Finance Agency (NCHFA). These federal tax credits are awarded at 4% or 9% levels to experienced developers constructing new affordable housing developments or rehabilitating existing affordable housing developments. The awarded tax credit depends on the strength of the proposed developments and the developer’s ability to secure additional funding.
Seven of the 14 developments are requesting 9% LIHTC awards. These awards are very competitive and, due to limited availability, not all developers seeking a 9% tax credit will receive a tax credit allocation from the NCHFA. Historically, Charlotte has been awarded three or four 9% deals each year.
Five of the 14 developments are requesting 4% LIHTC awards from the NCHFA. If the developments receive 4% LIHTC awards, the developers will come back to the city for approval of a tax-exempt bond allocation from NCHFA.
The NCHFA will announce all LIHTC awards in August 2021. The NCHFA will base its final LIHTC awards on:
Market demand and local housing needs.
A project’s ability to serve qualified residents for the longest affordability period.
Design and quality of construction.
Financial structure and long-term viability.
Developments will be awarded HTF gap financing contingent upon receiving a LIHTC award. City funding approved for developments that do not receive the LIHTCs will be returned to the Housing Trust Fund for future allocation.
The remaining two developments will be financed with non-LIHTC financing.