New Habitat Homes to Be Constructed In Mississippi With New Markets Financing
By Caitlin Jones
3 min read
Tax Credit Advisor, September 2009: Eighty-five new modest-priced homes constructed for sale to low-income households will be developed in Mississippi with the help of financing generated by the federal new markets tax credit (NMTC).
The homes, being built by two Habitat for Humanity affiliates, are being funded largely with dollars generated by a recently closed $10 million NMTC allocation provided by the New Markets Tax Credit Fund, LLC, a fund created by Los Angeles-based Strategic Development Solutions and Boston-based Economic Innovation International, Inc.
The new homes will be financed in part with capital from Capital One, the new markets tax credit investor. Another $8.2 million is being provided by the two Habitat for Humanity affiliates: Habitat for Humanity/Metro Jackson, and Habitat for Humanity of the Mississippi Gulf Coast.
Low-Income Buyers
The homes will be built in Hinds County, which includes the city of Jackson, and in Harrison and Jackson Counties on the Gulf Coast. The homes will be sold to low-income households earning between 30% and 80% of the area median income, with the majority being first-time home buyers. The homes will be made affordable through developer and buyer subsidies and zero-interest mortgages provided by the Metro Jackson and Mississippi Gulf Coast Habitat affiliates.
The new homes are designed to be environmentally sustainable and energy efficient. Each home will be constructed and outfitted with Energy Star standard windows, appliances, insulation, and heating/cooling systems. There may also be rooftop solar panels installed.
Buyers will have to participate in a homebuyer education program and ongoing financial and family life skills training designed to foster long-term financial stability. They must also invest 200 to 500 hours of sweat equity in home construction and/or other community-based volunteer projects. Consistent with the Habitat for Humanity model, all of the new homes will be constructed largely by volunteers.
Like many parts of the Jackson metro area and Mississippi’s Gulf Coast, the areas where the new homes will be built were damaged heavily by Hurricane Camille in 1969 and again by Hurricane Katrina in 2005. As a result, these areas suffer from inadequate and unsafe housing. Since Katrina, nearly 17% of all Mississippi residents have applied for FEMA assistance, and more than 41,000 units of temporary housing (mobile homes, travel trailers) were in use statewide. As of May 1, almost 1,800 FEMA units were still occupied.
Production Ramped Up
The new chunk of new markets funds will significant boost the housing production volume of the two Habitat affiliates in one fell swoop. Habitat for Humanity of the Mississippi Gulf Coast (HFHMGC), which serves Harrison, Jackson, and Stone Counties, has built or is constructing 300-plus homes since Katrina. Habitat for Humanity/Metro Jackson (HFH/MJ) has built more than 430 homes since its creation in 1986 for roughly 1,400 residents in Hinds, Madison, and Rankin Counties.
“This investment of NMTCs by National New Markets Fund will help us build new homes and keep the prices within reach of local low-income families,” said HFH/MJ Executive Director Cindy Griffin. The affiliate’s Web site says a Habitat home costs $56,000 to build.
“New markets tax credits are playing a key role in helping us achieve our goal of building 500 affordable for-sale homes by the end of 2012,” said HFHMGC Executive Director Chris Monforton.
Deborah La Franchi, president and co-founder of the National New Markets Funds, noted that the fund’s investment “will provide affordable, high-quality homes to families in great need, while promoting energy savings and environmental sustainability.”
