Developing Affordable Housing Options
Developers building or rehabilitating housing in Iowa may be eligible to receive certain state tax incentives.
House File 2448 repealed the Housing Enterprise Zone (HEZ) program and established the Workforce Housing Tax Credit Program (WHTC).
The application for the WHTC is available at https://www.iowagrants.gov
- Projects must meet one of four criteria:
- Housing development located on a grayfield or brownfield site
- Repair or rehabilitation of dilapidated housing stock
- Upper story housing development
- New construction in a greenfield (community with demonstrated workforce housing needs)
- The developer must build or rehabilitate at least four single-family homes or at least one multi-family building containing three or more units or at least two upper story units.
- Total project costs may not exceed $200,000 per unit for new construction or $250,000 per unit for historic rehabilitation.
- Total program benefits are limited to a maximum of $1 million per recipient.
- The housing project must be completed within three years of award.
- IEDA must approve the developer’s application for Workforce Housing Tax Credit prior to project initiation.
- A refund of state sales, service or use taxes paid during construction.
- An investment tax credit of up to a maximum of 10% of the investment directly related to the construction or rehabilitation of the housing.* The tax credit is based on the new investment used for the first $150,000 of value for each home or unit. This tax credit is earned when the home or unit is certified for occupancy and can be carried forward for up to five additional years or until depleted, whichever occurs first.
- Investment tax credits are fully transferable.
*If the project is, in part, financed through federal, state and local government tax credits, grants and forgivable loans, these monies cannot be included for purposes of calculating the investment tax credit.
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