Michigan Gov. Gretchen Whitmer has signed a bill creating the Michigan Housing Opportunity Tax Credit to work in tandem with the federal low-income housing tax credit.
The new credits will allow the Michigan State Housing Development Authority (MSHDA) to fund approximately 2,500 new units across the state each year. Up to $42 million a year in credits will be allocated, nearly doubling the state’s ongoing investments in affordable housing, according to officials.
"Housing is foundational to healthy families, thriving communities, and a growing economy. Michigan has made remarkable progress increasing housing production over the past several years through strong partnerships, but additional financing tools are needed to close our approximately 97,000-unit housing gap," said MSHDA CEO and executive director Amy Hovey. "The Michigan Housing Opportunity Tax Credit will build on the proven success of the federal low-income housing tax credit and will help make more affordable housing developments financially feasible across our state. By leveraging private and federal investment, this new tool will create housing opportunities for thousands of Michiganders, support employers and local economies, and strengthen communities for decades to come."
The credit will be available beginning next year.
House Bill 5806, which establishes the new program, calls for at least 25% of the credits to be allocated to 4% projects that are new construction and at least 25% of the credits to be allocated to 4% projects that are preservation deals.
The other half would be awarded to other qualified projects. Additionally, at least 30% of the credits must support developments in rural areas.
Michigan joins more than 30 other states with similar programs that provide capital funding for affordable housing projects.