TAX CREDITS & TAX-EXEMPT BONDS: STATE-BY-STATE PREVIEW

MAINE

BY BENDIX ANDERSON

AFFORDABLE HOUSING FINANCE • DECEMBER 2007

AUGUSTA—Infill projects will get a big advantage in the competition for Maine’s lowincome housing tax credits (LIHTCs) in 2008. "We are switching our focus to downtown locations and the re-use of existing or formerly used locations," said Diane Townsend, tax credit administrator for Maine Housing.

Projects planned for sites near downtown areas or amenities such as convenience stores or public schools will win up to 10 new points in Maine’s 80-point competition, according to the final qualified allocation plan (QAP) for the program. Up to five more points will go to projects planned for one of the "service center communities" identified in the QAP.

Officials will also only consider projects that meet Maine Housing’s Green Building Standards for the efficient use of resources. Infill projects fit well with green standards because they require less new infrastructure and often re-use existing sites or buildings, according to green building experts.

The competition will also encourage the preservation of existing affordable housing. In 2008, Maine’s entire $100,000 rural set-aside will specifically target applications to preserve multifamily housing previously funded by the U.S. Department of Agriculture’s Rural Development (RD). The change will help make up for the lack of RD funding for new apartment construction.

Other changes include a demand for deeper income targeting: To be considered for LIHTCs, a proposed development must reserve at least 60 percent of its units for residents earning up to 50 percent of the area median income.

Maine officials can afford to be picky. Developers applied for $7.6 million in 2007 LIHTCs, nearly four times the $2 million that the state had to reserve. The six winning projects will create 182 new affordable apartments. Nearly three-quarters of the 2007 LIHTCs went to projects to build seniors housing and a fifth went to projects to create housing for the homeless.

Maine also typically reserves $30 million of its $247 million in tax-exempt bond volume cap for rental housing projects. Maine Housing accepts applications on a rolling basis throughout the year.

In 2007, officials expect to close three deals to finance affordable housing with 4 percent LIHTCs and loans funded by lowinterest tax-exempt bonds.

2008 LIHTC PROGRAM: