Des Moines Housing: $11M+ in Federal Tax Credits Awarded

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iowa Receives $11 Million Boost for Affordable Housing Advancement

More than $11 million in federal housing tax credits have been awarded too fund the construction and rehabilitation of 781 affordable rental homes across Iowa,addressing a critical need for increased housing availability in the state. The funding will support projects in Cedar Rapids, Des moines, Iowa City, and Sioux City.

The Iowa Finance Authority (IFA) board of directors announced the allocation of the 4% federal housing tax credits on Thursday. This program, a component of the broader Low-Income Housing tax Credit program, strategically combines state tax-exempt bonding authority with federal tax credits to incentivize affordable housing developments.

Did you know?-The Low-Income Housing tax Credit (LIHTC) program is the most successful tool for creating affordable housing in the U.S., responsible for roughly 90% of all new units.

Expanding Affordable housing Options

The awarded projects are slated to receive a combined $76.4 million in tax-exempt bond financing, further amplifying the impact of the federal tax credits.A key driver of this increased investment is recent federal reform, which now allows a greater number of developments to qualify for the 4% program while together reducing the required bond amounts.

this shift is expected to accelerate the pace of affordable housing construction across Iowa. “Recent federal changes to the 4% program have strengthened our ability to bring more projects forward, allowing us to award nearly twice as many units as last year and grow our pipeline at a time when Iowa needs more than 18,000 new homes by 2030,” a senior official stated in a news release.

Pro tip:-Tax credits incentivize developers to build affordable housing by reducing their federal tax liability. thes credits are then sold to investors, generating capital for the projects.

Project Spotlight: southridge Flats in Des Moines

Among the projects receiving funding is Southridge Flats, a multifamily development planned for 7210 SE 14th St. in Des Moines. The project is expected to deliver 160 units of affordable housing to the community.

The IFA’s investment comes at a crucial time, as Iowa faces a meaningful housing shortage. The state is projected to need over 18,000 new homes by 2030 to meet the growing demand.This latest round of funding represents a considerable step toward addressing that challenge and ensuring access to safe, affordable housing for Iowans.

A complete list of the awarded projects is available online for public review.

Why this matters: Iowa is experiencing a critical shortage of affordable housing, impacting residents across the state. The $11 million investment aims to alleviate this issue by increasing the supply of rental homes for individuals and families with low to moderate incomes.

Who is involved: The Iowa Finance Authority (IFA) is the primary agency responsible for allocating the federal housing tax credits. Developers of affordable housing projects in Cedar Rapids, Des Moines, Iowa City, and Sioux City will directly benefit from the funding. The U.S.Department of Housing and Urban Development (HUD) provides the framework for the Low-Income Housing Tax Credit program.

What is being done: The IFA allocated $11 million in 4% federal housing tax credits to support the construction and rehabilitation of 781 affordable rental homes. An additional $76.4 million in tax-exempt bond financing will be leveraged alongside the tax credits.

How it effectively works: The 4% federal housing tax credit program combines state tax-exempt bonding with federal tax credits. Recent federal reforms have broadened eligibility and reduced bond requirements, allowing for more projects and units to be funded. Developers use the tax credits to attract investors, securing capital for construction and rehabilitation.

What’s next: Construction and rehabilitation projects are expected to begin shortly, with the 781