The Texas Department of Housing and Community Affairs (TDHCA) has awarded nearly $95.5 million in housing tax credits to finance the development or rehabilitation of 63 rental properties across the state. These awards, part of the 2024 Competitive (9%) Housing Tax Credit (HTC) Program allocation, are expected to have a value of approximately $955 million over a 10-year term.

The awarded tax credits will support developers in constructing or rehabilitating 4,475 units with rents affordable for households earning between 20 and 80 percent of the area median family income. This year's round marks a notable increase in the total number of affordable units produced compared to previous years.

"Construction costs have been trending upwards since the beginning of the COVID-19 pandemic," noted TDHCA officials. However, they highlighted that "the total tax credit investment per affordable housing unit decreased for the first time since 2020," allowing more units to be built compared to 2023.

Investors purchasing these credits can apply them toward their federal tax liability each year for ten years on a dollar-for-dollar basis in exchange for their investment in the property. This year's Competitive 9% HTCs will finance the construction of 45 new properties, including two adaptive reuse projects—one in Dallas and one in Fort Worth—totaling 3,450 affordable units. Additionally, it will fund the acquisition and rehabilitation of 18 properties offering another 1,025 units.

The Housing Tax Credit Program is authorized under the United States Internal Revenue Code and serves as Texas's primary method for directing private capital toward developing affordable rental housing. Developers use proceeds from selling these credits to help finance their properties, with awards potentially covering up to 70 percent of each property's eligible development costs.

A list of the awarded applications for the 2024 HTC cycle is available online but is subject to change if any developments cannot proceed as planned.