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confines of original affordable limit, which could possibly be up to 120% of area median <br /> income. It does require at least 20% of units must be affordable, earning at or below 80% <br /> average median income. <br /> AFL—CIO <br /> (HOUSING INVESTMENT TRUST About News login Contact Us QSeamh <br /> HIT <br /> _, �:.„c,.,l�w...... . fYM�it l 1�9 �" ll �,`�' '�•r <br /> rc 4 I" <br /> I <br /> I��I'I' Ills I) III{Ilii elf <br /> 'A <br /> m <br /> �9-3B 120,197 <br /> NET ASSETS FINANCED UNITS BUILT HOURS CREATED <br /> 10. Resources we have for workforce housing: AFL-CIO Housing Investment Trust <br /> (HIT) <br /> The AFL-CIO acts as an investor in this program. They have a 6.8-billion-dollar <br /> investment trust fund that allows them to do this. They can use Federal, and sometimes <br /> state, tax credits as deductions on their tax returns. For example, suppose the <br /> construction cost of a low-income housing project includes $100,000 worth of tax credit <br /> eligible expenses. An investor who is interested in reducing his taxes on his annual tax <br /> return can "buy" the tax credits. What he pays for the ability to use these tax credits on <br /> his tax return is a market function. Typically, in a stable market, an investor may pay <br /> $70,000 - $80,000 to a nonprofit developer in order to obtain the rights to use the <br /> $100,000 deduction on his tax return. The developer can then use this onetime infusion <br /> of cash to cover construction costs. This lowers the mortgage loan the developer must <br /> get from a bank, which in turn lowers the rents that are needed to repay the mortgage <br /> loan. Tax credits are equity instruments invented by the Federal government to bring <br /> down the cost of affordable housing and make the rents affordable for low-income <br /> households. <br /> 16 <br />