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As affordable housing continues to be a major issue across the United States, states are exploring ways to stimulate and support affordable housing construction. In response to the need for affordable housing, Alabama became the 30th state to provide a companion state loan to federal projects with a 4% LIHTC grant.

Governor Kay Ivey signed House Bill 346 into law, which creates the Alabama Workforce Housing Tax Credit, which provides additional assistance for Low-Income Housing Tax Credit (LIHTC) projects in Alabama. This credit will be paired with projects that have received 4% LIHTC allocations federally.

The Alabama Housing Finance Agency awards $50 million in loans annually to qualified projects, with the loans being drawable at $5 million per year over the 10-year credit period. The Alabama Workforce Housing Tax Credit has a project cap of $20 million ($2 million per year over 10 years). Within each award cycle, House Bill 346 requires that at least 20% of the $5 million cap be awarded to projects in rural communities. The other 80% of the award cycle can be awarded without geographic restrictions.

Preference will be given to applicants who commit to providing or subsidizing extracurricular programs for students for at least three years. Applications for the Alabama Workforce Housing Tax Credit program may be submitted as early as January 1, 2025, and will be accepted through the application deadline of September 30, 2027. For more information, visit the Alabama Housing Finance Agency website.

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