1602 Program: Payments to States for Low-Income Housing Projects in Lieu of Low-Income Housing Tax Credits

Program Description

The 1602 program is part of the American Recovery and Reinvestment Act of 2009. In 2009 and 2010, designated state housing agencies could exchange a portion of their 2009 Low-Income Housing Tax Credit (LIHTC) allocation for funds to spur the development of affordable housing and create and retain jobs. Until the end of 2010, state agencies could award the funds to developers for constructing and rehabilitating affordable rental housing. The 1602 funds are available for use through 2011.

Outcomes

In exchange for the LIHTCs, Treasury awarded nearly $5.7 billion to 55 housing finance agencies in States, the District of Columbia, and US Territories (collectively, “states”). States, in turn, subawarded the funds to developers for constructing or rehabilitating almost 1,500 housing developments with more than 89,000 units.

As for stimulating jobs, developers estimated that more than 116,000 jobs – carpenters, plumbers, electricians, masons, tile workers, landscapers, etc. – were involved in the construction and rehabilitation of the housing units, common areas, and on-site amenities, such as community rooms, laundry areas, and playgrounds.