The Strong Neighborhoods Housing Fund offers direct assistance to local governments and organizations to clean up and restore vacant and abandoned properties, attack blight, and restore neighborhoods hit hard by the foreclosure crisis. Delaware’s Strong Neighborhoods Housing Fund is available statewide, with priority for certain target areas. SNHF funding has been deployed in Wilmington, Dover, Seaford, Milford, Laurel, and Route 9 Corridor neighborhoods in New Castle County. SNHF funding prioritizes projects where housing redevelopment is part of a broader community revitalization plan.

The federal Low Income Housing Tax Credit program is the primary source of financing for the new construction and rehabilitation of affordable rental housing. The Delaware State Housing Authority (DSHA) awards these ten-year federal tax credits in Delaware through a competitive application process. The equity raised through the tax credit investment makes it possible for developers to attract the financing needed to create or restore affordable rental housing. LIHTC projects can include mixed uses and incomes.

Delaware’s Qualified Allocation Plan (QAP) describes the requirements and criteria for allocating these credits. Certain federally- and state-designated areas may receive extra points in the application. Projects applying for LIHTC credits can also access other financing through DSHA from the Housing Development Fund and federal HOME Investment Partnerships program.

More on the LIHTC in Delaware

The Housing Development Fund is Delaware’s state housing trust fund. Through the HDF, Delaware invests in safe, affordable housing to provide options for all Delawareans. The HDF provides financing to developers of affordable housing to low- to moderate-income Delawareans. The HDF offers loans for affordable rental housing, facilities and group homes for special populations, and grants for the development of affordable homes.

Delaware’s Brownfield Development Program encourages the cleanup and redevelopment of vacant, abandoned or underutilized properties which may be contaminated. Financial assistance is available to eligible parties in the form of Brownfield Grants funded by HSCA and the Brownfield Revolving Loan Fund. Both help eligible borrowers pay for the cleanup of brownfields.

Local Incentive Programs from towns, counties, and cities may also be available. Contact us today to find out more.

• The criteria for the credit mirror the federal R&D tax credit, with no additional requirements. Any company that qualifies for the federal credit and conducts R&D in Delaware automatically qualifies for the Delaware tax credit.
• Delaware’s credit is 50 percent of the corresponding federal credit. That means that if your company is eligible for a federal R&D tax credit of $100,000, you are eligible for a $50,000 tax credit in Delaware, provided that all your R&D activity is conducted here in the State. Moreover, the tax credit is refundable. So, if your company’s Delaware R&D tax credit exceeds your Delaware tax liability, you will get a refund from the State for the difference.

Exceptional opportunities for small businesses

• As passed in 2017, if a business generates less than $20 million in annual gross receipts (indexed annually1), the new credit provides an exceptional opportunity to optimize R&D investment. The company receives 100 percent (rather than 50 percent) of the corresponding federal credit. Plus, under the new law, you can apply the tax credit to receive a refund even if you have no revenue.
• In the past, companies not yet earning a profit did not typically apply for the federal R&D credit, because they had no federal tax obligation and the federal credit is not refundable. With the change to Delaware’s R&D tax credit policy, you have a reason to apply for the credit, because you can get money back from your R&D investment in the form of a state tax refund.

*Indexed threshold: For tax year 2019, it is $20,910,000. For 2018, it was $20,329,000

The AITC provides a refundable tax credit for qualified investors in innovative, Delaware-based small businesses – connecting talented, high-tech entrepreneurs with new sources of capital. Click here for more information on business eligibility and investor qualifications.

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The federal government’s goal is to award at least three percent of all federal contracting dollars to HUBZone-certified small businesses each year. See the HUBZone map to see where those certified zones are located.

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