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Kenneth Parisian looks out of the window of his apartment at Oakwood Village Tuesday in Havre. Parisian, moved last week from Rocky Boy's Indian Reservation to the housing complex. Gov. Steve Bullock announced Tuesday that a project to purchase and renovate Oakwood was one of five in the state approved for federal tax credits, with Affiliated Developers Inc. approved for more than $3.6 million to use in the project.
A courtyard at Oakwood Village is quiet Tuesday afternoon, November 20, 2018 in Havre, Mont.
Gov. Steve Bullock announced Tuesday that Oakwood Village in Havre will be one of five projects in Montana receiving Federal Tax Credits to develop affordable housing.
"This is a win-win for Montana," Bullock said in a press release. "Montana families thrive when they have a safe and affordable place to call home, and our economy continues to grow when we are able to house a productive workforce, while creating hundreds of construction jobs in local communities throughout the state."
The press release said Affiliated Developers Inc. will receive $3,881,250 in tax credits for acquisition and rehabilitation of Oakwood Village.
It added that the total project investment of $7,716,755 in Oakwood Village will result in 100 jobs for Montanans, creating $4.5 million in wages and salaries.
Affiliated Developers did not reply to multiple requests for comment.
Montana Board of Housing Executive Director Bruce Brensdal said Tuesday that tax credits come with some restrictions. The restrictions include the amount of rent that can be charged to the tenants of the building and tenant income level required to move in, he added.
Affiliated Developers has no deadline that the company will need to start working on the property, although most companies will start working on projects immediately after receiving the tax credits, he said.
"Until Monday, this project, along with all the others, didn't know if they had credits or not, so they were unable to do a whole lot," he said. "But now that they know. It's kind of like getting out of the starting box, they are all off and running."
Brensdal added that Oakwood Village is an existing Housing and Urban Development project and Affiliated Developers will need to work with HUD and the existing owners to finalize the purchase.
"Kind of the rule, or what they will have to do, is to have at least most of the rehab done by the end of 2020," he added.
Part of working with HUD will be that Affiliated Developers will need to accept the existing debt on the project, he said, adding that the debt will be part of purchasing the property from the existing owners.
Brensdal said, to his knowledge, the sale of the property was contingent on the awarding of the tax credits, and now that the tax credits have been awarded the sale should occur soon.
The process of receiving the tax credits is quite competitive, he said. Across the state this year, 17 projects applied. Out of those 17, eight were invited forward in the process to fill out a full application for the credits, and out of those eight, five were selected to receive the tax credits, Brensdal said.
The selection process has multiple factors that the board considers when they decide to fund a project, he added. A scoring process is used for each project. The board looks at geographic distribution, if a community has received tax credits in the past, and the housing market, in addition to many other variables, Brensdal said.
This project is important for the Havre housing market for a variety of reasons, he said.
"I think it's good news for Havre for sure," Brensdal said.
He added that he wanted to congratulate Havre in receiving the tax credits.
"I think there is an awful lot of competition for very few resources," he said. "So it's just a great thing that we are able to help keep those apartments (for Havre's) community and helping folks that live there."
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