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WATERLOO — A Twin Cities firm has received federal tax credits for the construction of a $7 million residential building in a neighborhood near Central Middle School on the city’s west side.

The Iowa Finance Authority has announced it is awarding $820,000 in federal tax credits to Common Bond Communities of St. Paul, Minn., to construct a three-story, 47-unit residential building at Greenhill and South Hackett roads, near a medical clinic building at 1015 S. Hackett Road off Katoski Drive/Greenhill Road.

Five of the building’s units would be reserved for families experiencing homelessness, the IFA announcement said.

Justin Eilers, a senior project manager with CommonBond Communities, said his firm is working with Lockard Cos. on a purchase agreement for the property. The tax credit award, he said, will allow the company to complete fundraising and potentially begin construction next year.

“It’ll be new consruction,” Eilers said. “We already have one other property in town, Unity Point,” on the east side along Newell Street near radio station KBBG. “We’re excited to start work and get ready for a second one.”

It was one of 12 project statewide the IFA funded with some $7.2 million in tax credits. CommonBond Communities had sought state Iowa Economic Development Authority funding through the City Council for a 24-townhome project on the same location in 2014 but was unsuccessful at that time. The council opted to support applications for two other projects

The Iowa Finance Authority is charged with allocating federal credits to affordable housing developers. The developers who receive tax credits sell them to investors to generate equity for the housing developments. The U.S. Internal Revenue Service makes an annual per capita allocation of federal tax credits to each state for the Federal Housing Tax Credit program.

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