THDA, Department of Revenue Receive Award for Community Investment Tax Credit

NASHVILLE, TN – November 4, 2009 – (RealEstateRama) — The National Council of State Housing Agencies has recognized a partnership between the Tennessee Housing Development Agency (THDA) and the Tennessee Department of Revenue with an award for Tennessee’s Community Investment Tax Credit.

The award recognized the partnership for innovation and creativity in engaging the private sector in affordable housing. The special achievement category award was announced at the National Council’s annual conference in October.

“I’d like to congratulate the Tennessee Housing Development Agency for this achievement and thank the revenue employees who have helped make this project a success,” said Commissioner Reagan Farr. “We are all very pleased with the results of this partnership.”

The THDA program, which is administered in cooperation with the Department of Revenue, allows financial institutions to receive a tax credit when qualified loans, investments, grants or contributions are offered to support low income housing activities.

THDA and Revenue developed the innovative program to provide incentives for the private sector to invest in affordable housing with minimal impact on the state budget. Private lending institutions have invested more than $81 million in affordable housing efforts, and have received nearly $8 million in credits against their franchise and excise fees in return. As a result, 2,764 affordable housing units have been produced. The 145 projects and initiatives, which were funded at an average of $559,200 per investment, have leveraged approximately $50 million in additional funding from other sources. 

Ted R. Fellman, executive director of THDA, said, “The clear measure of success of any new program is the impact it has on local communities.” 

Listed below are quotes and comments from some of the non-profit agencies and financial institutions that have participated in the Community Investment Tax Credit Program:

“In early 2008, Foothills Community Development Corporation (FCDC) began development of a 2.2 acre property in the city of Maryville, Tenn. This property became a 10-home subdivision for low income families. It was built and sold out by June 2009. The CITC funding saved us austere building funds, due to the lower interest rate, and vastly improved the time required to complete the subdivision. It allowed Foothills CDC to divert other funds to begin development of a follow-on subdivision.” Kelly Spears, Executive Director, Foothills CDC,Maryville, Tenn.

“The Community Investment Tax Credit has helped us enormously here at Urban Housing Solutions.  We have been able to refinance our existing loans on our properties at a reduced rate…as low as 1.25 percent…and this has allowed us to keep our rents at a below market rate and still provide the support services that our residents need.  The CITC program has often been more useful to us than grant funding.  It allows us to pursue new projects without having to find a grant to help subsidize the costs of the project.” Rusty Lawrence, Executive Director, Urban Housing Solutions,Nashville, Tenn.

“The Frayser Community Development Corporation has bought and renovated 40 houses in recent years. We have used the Community Investment Tax Credit as a critical tool in this its reinvestment efforts. CITC has helped provide convenient, low cost funds by offering incentives to our banking partners to lend to us for housing redevelopment. Frayser CDC is proud to be distinguished as having used the CITC more than any other agency.” Steve Lockwood, Executive Director, Frayser CDC, Memphis, Tenn.

The Department of Revenue is responsible for the administration of state tax laws and motor vehicle title and registration laws established by the legislature and the collection of taxes and fees associated with those laws. The Department of Revenue collects approximately 92 percent of total state tax revenue. During the 2008-2009 fiscal year, the department collected $10.2 billion in state taxes and fees. In addition to collecting state taxes, $1.9 billion of local sales tax was collected by the department for local governments during the 2008-2009 fiscal year. Besides collecting taxes, the department enforces the revenue laws fairly and impartially in an effort to encourage voluntary taxpayer compliance. The department also apportions revenue collections for distribution to the various state funds and local units of government. To learn more about the department, log on to www.TN.gov/revenue.

For more information about THDA, visit http://thda.org/.