Agenda - 09-09-2008- 1 - Laserfiche WebLink

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ld~ Orange County Housing and Community Development Date: September 4, 2008 To: Orange County Board of Commissioners From: -Tara L. Fikes, Director Subject: Eno Haven Follow-up This memorandum is written in response to questions posed at the August 19'" BOCC meeting regarding the Eno Haven apartment complex to be built in Hillsborough. Eno Haven will be a 76 unit multi-family rental complex developed by The Banks Law Firm that will serve low income elderly and disabled individuals. On August 15, 2008, the North Carolina Housing Finance Agency (NCHFA} announced the award of Low Income Housing Tax Credits to the Eno Haven project. On June 5, 2008, the BOCC awarded $1M in affordable housing bond funds to assist in the construction of this project. And on August 18, 2008 the BOCC approved the issuance of taxable bands to fund this bond allocation so that the project could receive the maximum benefit from the Low Income Housing Tax Credit Program (LITHO}. During that discussion some questions were raised and staff would like to provide the following information in response. introduction As stated earlier, this project will receive Low Income Housing Tax Credits from the N,C. Housing Finance Agency that will assist in financing the construction of this project. Summarily, the LITHO works in the following manner. "The Internal Revenue Service (IRS} allocates federal tax credits to states and states award the credits to eligible affordable housing developers. Those developers use the equity capital generated from the sale of the tax credits to lower the debt burden on tax credit properties, making it easier to offer lower rents. investors, such as banks, purchase the tax credits to lower their federal tax liability. Once the project is put in service, the #ax credit compliance period for the investor extends for 15 years, however, the property must maintain affordable rents for at least 30 years." (Source: US. Department of the Treasury)