The Delaware State Housing Authority (DSHA) increased the Housing Development Funds (HDF) available for 4% Low Income Housing Tax Credit (LIHTC) developments from $5 million to $8 million. The Housing Development Fund (HDF) is a State loan fund that provides gap financing for affordable housing developments and initiatives in Delaware. The 4% Low Income Housing Tax Credits (LIHTC) are non-competitive credits so, financing permitting, more affordable housing development can happen if developers utilize the 4% Low Income Housing Tax Credits (LIHTC). Stated differently, Delaware usually has three 9% Low Income Housing Tax Credit transactions awarded from the annual competitive 9% Low Income Housing Tax Credit round. If developers also start regularly submitting, securing financing and moving forward with 4% Low Income Housing Credit transactions, Delaware could easily double the number of affordable housing transactions being financed each year.
Delaware has not historically been the place for 4% deals. This may change. Since Governor Jack Markell appointed Anas Ben Addi as Housing Director, for the first time I can remember, DSHA created a set aside of funds to help finance 4% Low Income Housing Tax Credit developments. DSHA is clearly sending a strong message to encourage more 4% Low Income Housing Tax Credit developments in Delaware with this move to further increase the amount of loan funds available. This could also further address the shortage of quality affordable housing in Delaware.