Arkansas will create 698 affordable housing units using $13.3 million in federal tax credits awarded through the 9% Low Income Housing Tax Credit (LIHTC) program, according to the Arkansas Development Finance Authority.
The funding will support developments across the state, including potential projects in Northwest Arkansas, where local housing advocates have repeatedly cited a shortage of affordable rental units. The 9% LIHTC program provides tax credits to developers over a 10-year period, which are sold to investors to raise capital for low-income housing construction or rehabilitation.
While the state has not yet announced specific project locations, the funding is expected to be distributed among qualified applicants through the Arkansas Housing Trust Fund Corporation. Priority is typically given to projects that serve households earning at or below 60% of the area median income.
In Benton County, where median home prices continue to rise and rental vacancy rates remain low, the new funding could help address a growing affordability gap. According to the Northwest Arkansas Council’s 2023 housing needs assessment, over 30% of renters in the region spend more than 30% of their income on housing.
“This infusion of federal funding is a critical step toward addressing Arkansas’s affordable housing shortage,” said Jennifer Leach, executive director of the Arkansas Housing Trust Fund Corporation. “We’re working with developers and nonprofit partners to ensure these resources reach communities that need them most.”
The 698 units represent the largest single-year allocation of LIHTC funding in Arkansas since the program began in the late 1980s. The previous record was set in 2021, when the state was awarded funding to develop 520 units.
State lawmakers from both chambers supported the application, which was submitted to the Internal Revenue Service earlier this year. Arkansas received approximately $13.3 million in equity from the sale of the credits, which will be leveraged to finance construction and rehabilitation projects.
In Northwest Arkansas, where job growth has outpaced housing development, the funding could support ongoing efforts by organizations like Habitat for Humanity of Springdale and the Fayetteville Housing Authority. Both groups have previously used LIHTC funds to develop rental housing for low-income families.
“We’ve seen firsthand how these credits make projects financially viable,” said Sarah Cook, director of development at Habitat for Humanity of Springdale. “Without them, many developments wouldn’t happen, especially in rural areas or neighborhoods where land costs are rising.”
The Arkansas Development Finance Authority, which oversees the program, expects the first units to be completed within 18 to 24 months. Developers must adhere to strict affordability requirements, ensuring that units remain available to low-income tenants for at least 30 years.
For residents seeking affordable housing, the new units will be allocated through local housing authorities and nonprofit developers. Applications for specific developments will be managed by individual property managers, with eligibility determined by income and household size.
Those interested in learning more about available units or upcoming developments can contact their local housing authority or visit the Arkansas Housing Trust Fund Corporation website.
Source: 5News KFSM
