AgdaPkt 2016-04-11 Closed and Joint SA PFA

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Page 2 credit. In this instance, the developer/owner of a tax-exempt development must apply to the Committee and must meet both the federal and state statutory and regulatory requirements. The tax credits available are tied to the private activity bond cap limits, but are not deducted from the state’s annual tax credit ceiling. The annual credit available is based on approximately 4% (instead of 9%) of the “qualified basis” of the development. Federal law requires that the initial incomes of households in tax credit units not exceed either 60% or 50% of the area median income, adjusted for household size. When a project developer or sponsor applies for tax credits, he or she irrevocably elects one of the following minimum federal set-aside requirements: . A minimum of 40% of the units must be both rent-restricted and occupied by households whose incomes are 60% or less of the area median gross income, adjusted for family size, or . A minimum of 20% of the units must be both rent-restricted and occupied by households whose incomes are 50% or less of the area median gross income, adjusted for family size. Most credits are sold to corporate or individual investors through public or private syndication. Investors benefit from the tax credit by purchasing an ownership interest in one or more tax credit housing projects. In turn, investors claim a dollar-for-dollar credit against their tax liability over a ten-year period. Partnership equity contributed to the project in exchange for the credit typically finances 30-60% of the capital costs of project construction. No one project applying for 9% Tax Credits may receive an allocation of more than $2,500,000. CAP & TRADE (Affordable Housing and Sustainable Communities Program) The AHSC Program furthers the purposes of AB 32 and SB 375, by investing in projects that reduce greenhouse gas (GHG) emissions by supporting more compact, infill development patterns, encouraging active transportation and transit usage, and protecting agricultural land from sprawl development. Funding for the AHSC Program is provided from the Greenhouse Gas Reduction Fund (GGRF), an account established to receive Cap-and-Trade auction proceeds. The AHSC Program will assist Project Areas, by providing loans or grants, or any combination thereof, to projects that will achieve GHG emissions reductions and benefit Disadvantaged Communities through increasing accessibility of affordable housing, employment centers and key destinations via low-carbon transportation resulting in fewer vehicle miles traveled (VMT) through shortened or reduced trip length or mode shift from Single Occupancy Vehicle (SOV) use to transit, bicycling or walking. Three Project Area types have been identified to implement this strategy: 8.A - Page 5