Successful housing acquisition, rehabilitation or new construction often requires creative application of financing tools. We work with developers to package available local, state and federal financing resources. This results in a win-win, allowing developers to build new units while preserving affordable housing in the County.
Affordable Housing Investment Fund (AHIF)
The Affordable Housing Investment Fund (AHIF) is the County’s main financing program for affordable housing development. Since its creation in 1988, this revolving loan fund has helped to create the majority of Arlington’s nearly 7,500 approved affordable rental units that benefit low-income households. The Fund supports brick-and-mortar projects and services for residents of affordable housing apartment complexes and:
- Provides low-interest, subordinate loans for affordable housing developers
- Subsidizes rehabilitation to keep affordable housing safe and efficient
- Prevents significant loss of affordable housing units in multifamily projects
Columbia Pike Transit Oriented Affordable Housing (TOAH) Fund
This fund was designed to promote affordable housing development within designated boundaries of the Columbia Pike corridor. Affordable housing developers who are applying for Low Income Housing Tax Credits may put TOAH funds toward infrastructure-related items (like underground utilities, tree preservation and streetscaping) and County fees (such as Certificate of Occupancy, building permits and tap fees) to help keep their project under the Virginia Housing and Development Authority Total Development Cost limits and increase competitiveness for tax credits.
The Columbia Pike Tax Increment Financing (TIF) Area was established as a funding mechanism for the TOAH. Within specifically designated commercial and multi-family residential revitalization districts, 25 percent of tax revenue generated by new development and property appreciation will be dedicated to affordable housing along the Pike.
More information: TOAH Guidelines FY 2018
Housing staff can assist developers with various bond financing options:
- The Industrial Development Authority (IDA) of Arlington provides below-market-rate financing for the acquisition, new construction and rehabilitation of affordable housing projects.
- The Virginia Housing Development Authority (VHDA) provides tax-exempt and taxable bond financing to developers. VHDA has more than $100 million in annual tax-exempt bond authority.
Tax Exemptions and Credits
Several tax incentives are available to developers who qualify:
- Partial Tax Exemption: Arlington County provides a Partial Tax Exemption for eligible developers who do substantial rehabilitation of multi-family rental projects that contain more than five units and are at least 25 years old.
- Low-Income Housing Tax Credit (LIHTC): This federal program encourages Affordable Housing development by providing a federal income tax credit to property owners, and incentives for private investors to participate in construction and rehabilitation of housing for low-income families. Developers may obtain this tax credit for projects with committed affordable units. For program details, visit the VHDA website.
- Historic Preservation Tax Credits: These credits are often used in conjunction with the LIHTC program to finance preservation projects. To determine if a property qualifies for the credits, contact the County’s Historic Preservation Program at 703-228-3812. More information about federal and state rehabilitation tax credit programs is available at the Virginia Department of Historic Resources.