FAIRMONT — The West Virginia Housing Development Fund is working to provide affordable housing and low-interest-rate mortgages.

Gov. Joe Manchin recently made the announcement that more than $15 million of federal stimulus money will go toward new and rehabilitated rental housing in West Virginia. In Fairmont, Unity Terrace Apartments will receive funding.

The Housing Development Fund is in charge of administering the money. Executive director Joe Hatfield explained that this funding is a replacement for the Tax Credit Assistance Program, or TCAP.

“Developers of low-cost rental housing typically get a tax credit that they can sell in the marketplace, which they can then raise funds through that sale that they apply back to the construction of the building,” he said.

But over the past two years with the financial crisis, the prices that developers have been able to receive on the sale of their tax credits have been very small. This means they haven’t been able to raise enough money to put back into the construction, which doesn’t make those building projects feasible, Hatfield said.

He said the U.S. Department of the Treasury will provide sufficient cash to cover the difference between what’s needed to make those projects viable and what they’re able to raise in the marketplace through a tax credit allocation.

“It keeps the rent affordable ... and makes the deal a feasible, practical deal,” Hatfield said.

Fourteen properties in the state will benefit from the stimulus funding, which will house 865 families.

“They’ll be affordable by a moderate-income family,” Hatfield said.

In addition to Fairmont, developments in the following cities were selected: Charleston, Martinsburg, Mount Hope, Ranson, Wheeling, Bunker Hill, Moorefield, Harpers Ferry, Shepherdstown, Beckley, Point Pleasant and Lewisburg.

Hatfield said Unity Terrace Apartments, a large, very old apartment development in the Friendly City, will completely be reworked and rehabilitated.

For older projects that need rehabilitation, the money will allow those properties to meet modern standards, he said. Additional new rental housing will also be created for families in those communities.

“It’s going to provide new, safe, decent, affordable housing that meets today’s standards,” Hatfield said. “It’s going to put people to work.”

Throughout those communities, a variety of professionals will be employed, from roofers to window, kitchen and carpet experts, he said.

“This brings new jobs, new hope, new promise to our towns in addition to affordable housing and for that, we are all thankful,” Manchin said in a press release.

In other news, the Housing Development Fund is issuing $150 million in bonds that will offer low-interest-rate mortgages to 1,000 to 1,200 families in West Virginia.

“This is the largest bond issuance by the Housing Development Fund in its history and will offer its borrowers rates, terms and assistance never offered before,” Manchin stated in another media release. “The Housing Development Fund has gone all out to provide qualified West Virginia borrowers the best mortgage program ever.”

Hatfield said the Housing Development Fund hasn’t been able to issue bonds lately for low cost single family loans because the economy caused tax exempt financing to not work. The interest rate that the organization would have had to charge for sales tax exempt bonds would have been higher than what was available in the secondary market.

“Bonds have not been feasible for the last year and a half because of the process that we would have to pay in order to get those bonds sold,” he said. “Treasury has given us the opportunity to sell bonds directly to them.”

With the Treasury purchasing the bonds, the Housing Development Fund will in turn be able to make mortgage loans at competitive rates, Hatfield said. This fixed rate loan is available at about 5 percent, and in some cases no down payment is required.

He said a family will be able to get into a house at a good interest rate, and up to $15,000 will be available to the borrower to cover any closing costs or down payments if needed. Plus, they would be eligible for tax credits, such as for first-time homebuyers.

“It’s going to make available to the buying public the best opportunities to buy probably ever,” Hatfield said. “Families are going to be able to buy homes more affordably than they’ve ever been able to buy a home.”

Banks, mortgage lenders and credit unions in the state will begin taking loan applications on Jan. 2, 2010.

“It provides a unique opportunity to take advantage of low cost rates on the loans, the down payment closing cost assistance, and also the eligibility of the tax credit, which makes buying a home probably the most affordable than I’ve ever known them to be,” Hatfield said.

In most counties, these loans are designed for first-time homebuyers, he said. However, in some targeted areas the borrower doesn’t have to be a first-time homebuyer, and the Housing Development Fund also has other assistance programs available.

“Just about anyone who wants to buy a home, this is absolutely a wonderful time to be doing it,” Hatfield said.

For more information on these programs, contact the West Virginia Housing Development Fund at 304-345-6475 or go to www.wvhdf.com.

E-mail Jessica Legge Borders at jlegge@timeswv.com.