(AUSTIN) — The Texas Department of Housing and Community Affairs (“TDHCA”) has announced a funding package that could total $6.7 million to private developers constructing the 60-unit Riverside Village Apartments, a proposed rental property in Rio Hondo that will feature reduced rents.

The rental property will be constructed at the intersection of Robertson Road and Bates Road in the city’s northeast quadrant, near Rio Hondo Elementary School.

Financing from TDHCA will allow the developers to lease all 60 units at rents affordable to households earning up to 60 percent of the area median family income. For Cameron County, this equals an annual income of $31,500 for a family of four.  

“The availability of good, affordable rental housing is increasingly important to Texas’ growing numbers of young working families, as it expands the housing choices for these households while offering them a path to improved living standards,” said Tim Irvine, TDHCA Executive Director, in announcing the award.

Besides bringing greater choice and stability to low-income households, Irvine also noted the program’s economic multiplier effect will ensure that the entire city will benefit from today’s award.

“When you combine the jobs, payroll funds and sales tax revenue these properties generate,” he explained, “TDHCA anticipates that this financing package could generate as much as $4.7  million for the Rio Hondo economy, as well as an estimated 73 construction and related jobs.”

Funding includes an estimated $6.2 million in equity financing through an allocation of Housing Tax Credits in addition to a $500,000 zero-percent interest loan made through the state housing agency’s HOME Investment Partnerships (“HOME”) Program.

The federal Housing Tax Credit Program is the state’s primary means of directing private capital toward the development of affordable rental housing. Developers and their investment partners use the credits to offset their federal tax liability on a dollar-for-dollar basis in exchange for the construction or rehabilitation of affordable rental housing.

The U.S. Department of Housing and Urban Development is the funding source for the Department’s HOME Program. The HOME Program helps TDHCA provide grants and loans to eligible cities, counties, public housing authorities, and both nonprofit and for-profit developers to expand the supply of decent, affordable housing in Texas.