June 30, 2009
DONOVAN AWARDS $11.9 MILLION TO JUMP-START AFFORDABLE HOUSING CONSTRUCTION IN RHODE ISLAND
Recovery Act funding to stimulate the production of affordable units stalled by recession
WASHINGTON - U.S. Housing and Urban Development Secretary Shaun Donovan today awarded nearly $12 million
to jump start affordable housing programs in Rhode Island that are currently stalled due to the current economic recession. Funded through American Recovery and Reinvestment Act of 2009 (Recovery Act), HUD's new Tax Credit Assistance Program (TCAP) will allow the Rhode Island Housing Finance Authority to resume funding of affordable rental housing projects across the state while stimulating employment in the construction trades.
"The intended purpose of the American Recovery and Reinvestment Act is to jumpstart the nation's ailing economy, with a primary focus on creating
and saving jobs in the near term," said HUD Secretary Shaun Donovan. "The
funding being awarded today is an important step in achieving the goal of putting American people back to work
while at the same time providing quality, affordable housing options for low-income families at a time when it is needed more than ever."
The current economic and financial crises present significant challenges for the construction industry, particularly residential construction. One of the
by-products of this crisis has been the freezing of investments in the LIHTC market. Tax credits provide an incentive for investors to provide capital to
developers to build multi-family rental housing for moderate- and low-income families across the nation. Since the contraction of the credit market, and
as traditional investors remain on the sidelines, the value of tax credits has plummeted. Consequently, as many as 1,000 projects (containing nearly 150,000 units of housing) are on hold across the country.
In response, the Recovery Act provides $2.250 billion for TCAP, a grant program to provide capital investments in these stalled Low-Income Housing Tax
Credit (LIHTC) projects. HUD is awarding these TCAP grants by formula to state housing credit agencies to complete construction of qualified housing projects
that will ultimately provide affordable housing to an estimated 35,000 households nationwide. Since a major purpose of this program is job creation, the
Recovery Act establishes ambitious deadlines for expenditure of grant funds and requires state
housing credit agencies to give priority to projects that can begin immediately and be completed by February 16, 2012.
Note to reporters: For specific information on how the grantees will administer the funding (or to request an interview with a participant in the program), please contact the appropriate housing authority. For information
on the Family Self Sufficiency program, or other HUD programs and services, please contact Kristine Foye at