The Turtle Mountain Housing Authority recently received an award of $516,598 in Low Income Housing Tax Credits (LIHTCs) from the North Dakota Housing Finance Agency. TMHA will use this award to build 28 affordable housing units in two multifamily buildings in Belcourt and St. John, N.D., which will be reserved for families, disabled residents and long-term homeless households.
Nearly $3.4 million is expected to be raised for the project when the tax credits are sold to an investor.
Of the 14 applications submitted to NDHFA in February, four projects received awards. Travois, Inc. provided consulting services for the application.
“The Low Income Housing Tax Credit program is the best way for tribes to develop much-needed affordable housing,” said David Bland, chairman of Travois. “We have worked with the Turtle Mountain Housing Authority on its previous LIHTC developments and look forward to seeing this new project progress.”
Of the 28 new units that will be built, five will be reserved for either disabled or previously homeless residents. Three units will be affordable to households at 30 percent of the Area Median Income (AMI), and 25 units will be affordable to households at 60 percent AMI.
Energy-Star windows, appliances and lighting fixtures and water-conserving appliances and fixtures will be utilized. Each building will include an elevator, a community room with kitchen facilities, exterior landscaping and will be wired for high speed internet access. The units are expected to be complete and occupied by December 2011.
“The housing needs on the Turtle Mountain Reservation are great,” TMHA Executive Director Ron Peltier said. “The Low Income Housing Tax Credit program is a viable option to meeting this need. This project will provide 28 homes to our community. Although it is a strenuous process, at the end of the day, it is a great feeling to know that we are doing what we can to meet our needs.”
Turtle Mountain Housing Authority has used the Low Income Housing Tax Credit program to build or rehabilitate 101 homes with a total value of about $11.3 million. In late February, TMHA was recognized as a Champion of Affordable Housing at NDHFA’s Statewide Housing Conference.
The Low Income Housing Tax Credit program was developed by Congress is 1986, and its regulations are provided for in Section 42 of the Internal Revenue Code. It was created to encourage private investment in the construction or rehabilitation of housing for low-income families. The IRS makes tax credits available to each state, and the states are responsible for developing Qualified Allocation Plans (QAPs) and determining which projects receive awards. Investors are interested in buying tax credits to reduce the amount of taxes they owe the federal government. Tax credits offset taxes on a dollar-for-dollar basis for a 10-year period. Tribes can raise the equity they need for building projects through the LIHTC program, which lowers the amount a tribe will need to contribute to the project. It does not need to repay this equity but must follow all regulations for the 15-year compliance period.
About Travois
Travois, Inc. is the leading housing and economic development consulting firm in Indian Country. Since 1995, Travois has brought $350 million in private equity capital to Indian Country, which has helped build or rehabilitate more than 3,500 homes through the Low Income Housing Tax Credit (LIHTC) program, and has raised more than $40 million to support tribal commercial ventures through the New Markets Tax Credit (NMTC) program. Travois New Markets received an $80 million allocation of New Markets Tax Credits in 2009, which it is working to invest in qualified projects. The Travois family of companies offers housing and economic development assistance, compliance support, design services and comprehensive training to the nation’s American Indian population with clients from Alaska to Maine.