The Ohio Housing Finance Agency (OHFA) is working on drafting the rules for the newly created Single-Family Housing Tax Credit program that provides $50 million a year in ten-year tax credits, for four years, to incentivize the construction of new single-family homes for Ohio’s growing workforce.
OHFA facilitates the development, rehabilitation, and financing of low- to moderate-income housing. OHFA’s programs help first-time homebuyers, renters, senior citizens, and others find quality affordable housing that meets their needs. Formerly a division of the Ohio Department of Development, OHFA became an independent state agency on July 1, 2005. OHFA funds competitive fixed-rate mortgage loans and provides financing for the development and rehabilitation of affordable rental housing through the Housing Tax Credit program, issuing tax-exempt mortgage revenue bonds, and other affordable housing programs.
OHFA is holding public hearings on proposed rules for the Single Family Tax Credit program but the approach for the program are coming together. Established as a public-private partnership, the Single-Family Housing Tax Credit will bring together local government entities with a project development team (homebuilders, investors, and realtors) to identify the location and scope of construction of single-family homes in a community. The local government entity and the development team will need to submit a project proposal and application for tax credits to help finance the construction of the houses. Applications will be scored based on the criteria outlined in the Allocation Plan and tax credits will be competitively awarded. The tax credits may then be claimed over a ten-year period. The homes will be sold to qualified Ohio homebuyers at the construction cost.
Eligible entities for the Single-Family Tax Credit will be local government entities (county, township, municipal corporations, or regional planning commissions, community improvement corporations, economic development corporations, county land reutilization corporations, or port authorities) along with a development team that may submit an application. The amount of tax credit awarded will be the appraised value of the home (after construction) minus the total cost of construction.
According to the proposed rules, a “Qualified buyer” of the single-family home using this tax credit means an individual who (1) has a verified income at eighty percent to one hundred and twenty percent of the area median income, (2) who has obtained a pre-approval letter from a permanent lender demonstrating that such individual is qualified for a mortgage, (3) has attended homebuyer education, (4) has a credit score of six hundred and forty and above, (5) intends to use the single-family dwelling as a primary residence for the entire affordability period, and (6) is a first time home buyer and/or eligible home buyer. Qualified projects may either be central city/suburban or rural according to the proposed rules. A qualified central city/suburban project” means a minimum of twenty (1) single-family dwellings to be constructed, (2) vacant structures to be renovated for habitability, or (3) a mix of single-family dwelling to be constructed and vacant structures to be renovated for habitability, provided that the development costs of the project are less than the appraised value of the project at completion. A qualified rural project means (1) a minimum of five single-family dwellings to be constructed, (2) vacant structures to be renovated for habitability, or (3) a mix of single-family dwellings to be constructed and vacant structures to be renovated for habitability, provided that the development costs of the project are less than the appraised value of the project at completion.
Gaining OHFA’s Single Family Housing Tax Credit will be a competitive process and awards hopefully can help address the lack of available workforce housing in urban and rural areas. Please contact Dave Robinson at [email protected] if you need assistance with gaining OHFA’s Single Family Housing Tac Credit or other local, state and federal government economic development program funding.