Builders of low- to medium-income housing anxiously await HUD stimulus - bizjournals:

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million in American Recovery and Reinvestment Act funds to jump start delayed building projectsw acrossthe state. THDA will post on its Web site its selectio n of Tennessee buildersFriday afternoon. Builders eligible for the funds build and manage singleand multi-family rentalk units for low- to-medium-income families. The funds came to THDA througuha $2.2 billion ARRA allocation to the U.S. Departmeng of Housing and Urbanb Development for the Tax Credit Assistance Program and the Sectiob 1602 tax creditswap program.
Under norma economic conditions, these kindz of builders rely on tax credits from THDA to begin work on a housing The money givesbuilders up-front equity in projects to help them get loanzs from financial institutions perhaps wary of investing in a development that will producew low rents. These credits can give builders upwarxdof $10 million over 10 years. Once builders’ tax credits are they can sell them to investment firms and companie s looking to lower their tax Inyears past, builders coul d get around $.90 on the dollard for their tax credits. Sincd then, the credit market shrank.
Traditional investors like and have been sideliner and the value of tax credits They now payaround $.65 per dollar — that is, if anyonwe will buy them at all. “Withn all the shakeups in the economy, people have just stopped buying tax credits and now hundreds of millions of dollares in projects are stalled in says , founder Harold Buehler. “Thids is the first time in 20 years I am not buildinba house.” Buehler has had to lay off six hard-working” construction employees this year. He was approvesd for $9.7 million in tax credits last year to builcda 125-unit, single-family housing developmenr in North Memphis.
The project is on hold becausehe can’tf find a buyer for the credits. Shoulf the THDA choose to fund the project withARRA Buehler’s awarded tax credits will turn into grant money from the government. If approved, Buehler would take the grant guarantee letterr from THDA to a constructio n lender and get a loan for the remaindee ofthe project. If all goes well, he says his companh will start the project in the Patricia Smith, director of public affairs for THDA, says when the monet is released, economic stimulation will “This money will simply create jobs,” Smitb says. “The construction industry is down and jobs will becreatedf there.
Materials will be purchased so we’re confident that in Tennessede this relief is goingto work.” Buehlerr projects roughly 6,000 jobs could be saved or createcd if even most of the building projects on hold in Tennesseee can move forward. “I’ve hears it said that for every 100homesa built, there are 100 jobs Buehler says. “That’s from the guy at the bricko company to the one who delivers the brickm to the worksite and, finally, to the guy who puts the bricko on the house.” When HUD Secretary Shaun Donovan announced the ARRA funds on July 1, he said nearly 1,000 projectz were on hold across the U.S.
that accountee for nearly 150,000 unitsz of housing.