The Massachusetts HDIP Tax Credit (Housing Development Incentive Program), now in its eighth year, is a desirable one-year tax credit offered to developers who build or redevelop a building into market-rate housing in one of the 26 designated Gateway Cities in the Commonwealth of Massachusetts*. The program recently made a change in the way it allocates credits amongst projects due to the demand for credits that have been outpacing the supply of the available credit authority of $10 million per year. The HDIP program consists of three major components:
- The creation of by a municipality designated as a Massachusetts Gateway of a Housing Development (HD) Zone;
- The creation of a Tax Increment Exemption (TIE) district, inclusive of the HD zone, within a Gateway municipality;
- The approval by the Department of Housing and Community Development (DHCD) of a funding application for a specific project located within an approved HD zone and with an approved TIE agreement.
The third component, the application process, has changed from a rolling application process to a yearly scheduled competition format similar to other credit programs that DHCD oversees.
The program change was made in July 2021 and now requires the developer to submit a pre-application (assuming the HD Zone and TIE agreement are in place) on a fixed date followed by a combined preliminary/conditional certification application, also on a fixed date. Once the developer receives an award through the HDIP competition, the developer can complete the project and can submit an application for final certification at any time once the developer has met its leasing or sale requirement.
The MA HDIP Tax Credits can be sold or transferred to a buyer who has a tax liability in Massachusetts. Clocktower Tax Credits works with numerous investors who are looking to buy these credits that will help reduce their tax liability.
If you have a project in Massachusetts, or anywhere in the country, that needs investor tax credit equity, don’t hesitate to call us. We work with developers with prospective HDIP, Historic Rehabilitation, or Low-Income Housing tax credit projects seeking Federal and/or State tax credit equity, and other unique state incentives such as the Pennsylvania REAP credits. For inquiries, please contact Sue Ellyn Idelson at (978) 793-9574 or SIdelson@ClocktowerTC.com.