WASHINGTON – U.S. Senators Jim Webb and Mark R. Warner today announced that the U.S. Department of Housing and Urban Development (HUD) has approved $44.2 million to jumpstart affordable rental housing programs in Virginia.

Funded through the American Recovery and Reinvestment Act of 2009, HUD’s new Tax Credit Assistance Program (TCAP) provides grants to state housing finance agencies to resume affordable rental housing projects throughout the country while also creating jobs in the hard-hit construction industry.

“Today’s announcement will resume funding assistance for local communities to develop affordable housing and also make available more construction jobs across Virginia,” said Senator Webb.

“These grants will significantly boost our efforts to put Virginians back to work while also providing quality, affordable housing options for low-income families at a time when those options are critical,” Senator Warner said. “These grants also should help unlock the credit markets while supporting shovel-ready projects.”

Current economic challenges have frozen investments in the low income housing tax credit (LIHTC) market, and those tax credits create an incentive for investors to provide capital to developers to build multi-family rental housing for moderate- and low-income families across the nation.  Since the contraction of the credit market, and as traditional investors remain on the sidelines, the value of tax credits has plummeted.  Consequently, as many as 1,000 projects (containing nearly 150,000 units of housing) are stalled across the country.   

In response, the Recovery Act provides $2.25 billion for TCAP, a grant program to provide capital investments in these stalled LIHTC developments. HUD is awarding TCAP grants by formula to state housing credit agencies (all 50 states plus the District of Columbia and the Commonwealth of Puerto Rico) to complete construction of qualified housing projects that will ultimately provide affordable housing to an estimated 35,000 households nationwide. Since a major purpose of this program is job creation, the Recovery Act establishes ambitious deadlines to spend the grant funds and requires state housing credit agencies to give priority to projects that can begin immediately and be completed by February 16, 2012.

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