Mississippi Home Corporation Announces 2023 Housing Tax Credit Recipients
Mississippi Home Corporation has announced the Housing Tax Credit Recipients for the 2023 Tax Credit cycle. This program was designed to encourage private sector investment in the new construction, acquisition, and rehabilitation of rental housing affordable to low-income households.
The Housing Tax Credit Program (HTC) is a credit or reduction in tax liability each year for 10 years for owners and investors in affordable-income rental housing that is based on the costs of development and the number of qualified affordable-income units.
The tax credit rate is approximately 4% for acquisition costs, 9% for rehabilitation and new construction costs. The actual credit rate is based on prevailing Treasury interest rates to provide a “present value” of 30% and 70% respectively over 10 years. The acquisition credit can only be earned if there is a minimum amount of rehabilitation spending and, with certain exceptions if ownership has not changed in the previous ten years.
The annual credit amount is the credit rate multiplied by average eligible costs for the number of income-restricted units where tenant incomes and rents are below stated maximums. Non-depreciable costs, such as land, and the amount of any grants are excluded from eligible costs. Additional units that qualify after the first year earn two-thirds of the annual credit amount for the balance of the 15-year compliance period.