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

WEST VIRGINIA

BY DANA EFINGER

AFFORDABLE HOUSING FINANCE • DECEMBER 2007

CHARLESTON—Affordable housing developers in West Virginia will compete for $3.54 million in low-income housing tax credits (LIHTCs) in 2008. The first-round application deadline is expected to be in April, with reservations being made June 15, 2008.

A number of states are receiving requests for additional credits for projects that have previously received a LIHTC award. This is the case in West Virginia because of rapid increases in costs. Some projects in the state need substantial rehabilitation, according to Michele Wilshere, manager of the LIHTC program for the West Virginia Housing Development Fund (WVHDF).

The WVHDF adopted a two-year qualified allocation plan for 2007 and 2008. The main point categories for 2008 are the same as for 2007: The property’s location can score 200 points, the quality of the project’s housing can earn up to 185 points, and the developer’s ability to produce the housing garners up to 170 points. The longer the period of affordability a project commits to, the more points it can win, up to a total of 150, and projects that efficiently use their credits are rewarded up to 70 points.

In 2007, WVHDF officials reserved more than $4.1 million in LIHTCs to 14 developments that have 666 tax credit units (out of a total of 669 units). More demand existed than available credit, with developers requesting more than $6.6 million in tax credits. For-profit developers received nearly 88 percent of the reservations in 2007, increasing from about 72 percent in 2006. Nonprofit groups received 8.6 percent of reservations, while public housing authorities received 3.6 percent of the 2007 reservations.

Developers continue to seek credits for preservation deals in West Virginia, with most of the projects located in the state’s rural areas. New construction in rural areas and rural preservation deals were oversubscribed slightly, by ratios of 1.37 to 1 and 1.13 to 1, respectively.

WVHDF’s tax-exempt private-activity bond volume cap has increased from $248,000 in 2007 to $260,000 in 2008. None of these funds are used for multifamily housing.

2008 LIHTC PROGRAM: