January 10, 2017 – The Tennessee Housing Development Agency closed a record $198.1 million in tax-exempt bonds to finance the construction of affordable housing in 2017.
The bonds will help pay for the private development of 2,412 apartment homes at 14 locations across the state.
“There is simply a shortage of rental housing in many Tennessee cities, and people at the lower end of the income spectrum are getting squeezed out,” said THDA Executive Director Ralph M. Perrey. “Incentives to build affordable housing are critically needed at this time. THDA is making great use of tax-exempt bonds and housing tax credits to encourage the private sector to work harder and faster to bridge the gap in Tennessee between supply and demand.”
Private developers must apply to THDA for the authority to use tax-exempt bond financing for their planned affordable housing developments. The maximum dollar amount of tax-exempt bonds that THDA can commit each year is set by the IRS and the State of Tennessee. The $198.1 million committed and closed in 2017 is the highest amount in the program’s 15-year history.
These bonds will provide funding for:
- 896 apartment homes at four properties in Davidson County
- 354 apartment homes at two properties in Hamilton County
- 696 apartment homes at three properties in Knox County
- 55 apartment homes at one property in Madison County
- 134 apartment homes at one property in Montgomery County
- 279 apartment homes at two properties Shelby County
In exchange for using tax-exempt bond financing to help cover construction costs, apartment communities must by law keep rent affordable to Tennessee families of low income for a period of at least 15 years.
Developers planning to apply for the authority to use tax-exempt bond financing in 2018 may submit their applications to THDA beginning February 1.