Alabama Multifamily Rental Housing Incentive Program
About the Program
AHFA administers multifamily programs that create affordable rental housing by providing funding and tax incentives that help developers build or rehabilitate properties for Alabama’s low-income families.
Through these programs, AHFA has provided more than $1.2 billion in funding and tax incentives to help build or preserve 939 developments comprising 58,154 units. Another 82 developments, comprising 4,272 units, are in various stages of completion. AHFA-financed developments can be found in every county throughout the state.
AHFA is Alabama’s administrator of the federal HOME Investment Partnerships Program (HOME) and Low Income Housing Tax Credit (LIHTC) program, as well as the National Housing Trust Fund. In addition, AHFA issues Multifamily Housing Revenue Bonds for the acquisition, renovation and new construction of affordable rental housing.
Housing Credits & HOME
The Low Income Housing Tax Credit (LIHTC) program is the largest production driver of new and rehabilitated affordable rental housing in the nation. Each year, the Internal Revenue Service distributes housing credits to state housing finance agencies.
AHFA, as Alabama’s designated administrator of the LIHTC program, then allocates these credits by conducting a competitive application cycle that ensures credits are distributed throughout the state to areas with the greatest needs. AHFA implements allocation plans each year, which include selection criteria, an evaluation process, design quality standards, environmental requirements, and compliance monitoring procedures.
Housing credits provide a federal income tax credit as an incentive to investors. Investors may receive a dollar-for-dollar credit against their federal income tax liability each year for 10 years. In exchange for receiving the credit, investors and/or owners must reserve a percentage of units for the area’s lower-income residents, based upon the area’s median income. In turn, owners generally make a 30-year commitment to ensure the units are decent, safe, and affordable for eligible tenants.
HOME Investment Partnerships
The HOME Investment Partnerships Program (HOME) is a federally funded program established in 1990 as part of the Cranston-Gonzalez National Affordable housing Act (the “Act”). HOME provides funding to developers to construct new, affordable rental housing.
AHFA, as Alabama’s HOME program administrator, conducts a competitive application cycle. As it does with housing credits, AHFA implements action plans each year, which include selection criteria, an evaluation process, design quality standards, environmental requirements, and compliance monitoring procedures.
In order to ensure programs benefit the greatest number of Alabamians possible, HOME funds are combined with housing credits. Leveraging these two sources of funds allows projects to target additional low-income families.
Multi-Family Bonds
What are Multifamily Bonds?
AHFA issues Multifamily Housing Revenue Bonds (bonds) on a project-specific basis for the acquisition, renovation, and new construction of affordable rental housing.
Bonds provide debt financing to developers using proceeds from the sale of tax-exempt bonds in exchange for developers reserving a portion of their units for tenants earning less than the area’s median income.
Because most of these bonds are tax-exempt, developers may also qualify for housing credits. The sale of these credits offer developers additional funds for the production of affordable rental housing. Combining these funding sources ensures programs benefit the greatest number of Alabamians possible by encouraging the leveraging of additional loan, grant, and philanthropic sources.
Thinking About Alabama?
You've learned about the program. Now explore communities across Alabama to find the place that's the best fit for you.
Explore:
- LookyLOO Reviews of Alabama cities
- Neighborhood Guides
- Local Reviews
- Schools
- Lifestyle
- Save cities to your Movebook