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��y �f R��e�r�l�� tl+ltr��S�� to the income requirements for qualified mortgage bond projects under Section � 143(f) of the Internal Revenue Code. The income requirements under this code �.� are met only if all owner financing provided under the issue is provided for mortgagors whose family income is 115 percent or less of the applicable median � family income. For residential rental property, the property must satisfy the income requirements for a qualified residential rental project as defined in section 142(d) of the Internal Revenue Code. A rental property also satisfies the above � requirements if 50 percent of the residential units in the project are occupied by individuals whose income is 80 percent or less of the area median gross income. In addition, a TIF district may be designated a"qualified housing district� if (1) the rental units benefited from tax increment financing meet all the requirements for a low income housing credit or (2) at least 95% of the owner-occupied units benefited from tax increment financing are purchased by individuals whose family income is less than or equal to the income requirements for qualified mortgage bond projects under section 143(f) of the Internal Revenue Code. A site that could accommodate a housing TIF district does not automatically meet the requirements of a Redevelopment TIF district. The two are often mutually exclusive. 2. Tax Abatement (Minnesota Statutes Chapter 469.1812-1815) Minnesota Statutes refer to tax abatement as the deferral of property taxes. Under Minnesota law, taxes due on real property subject to tax abatement must still be paid as due. If tax abatement is in place, the appropriate portion of the taxes generated from the benefited properties can be applied to development purposes. These taxes must be used to offset the costs agreed to under an abatement agreement. Tax abatement can be generated on land and existing buildings as well as on new improvements. Limited restrictions exist for the ultimate use. The maximum aggregate amount of abatementfor a political subdivision is the greaterof 1�'s of the current tax levy or $200,000. Examples of the types of properties that can be abated include, but are not limited to: - t�r�i77rn�:�r� 3 r'�I'tJ�y;r:�l ■ Retail Housing � Cities, counties, towns, and school districts all have the authority to grant � abatements. In addition, the county and school district affected by the abatement have the option of declining participation. If one of the jurisdictions should choose � to decline, the maximum duration of abatement is 15 years. In the case in which the city (or town), county, and school district all participate, the maximum term of the abatement is 10 years. � . svaiNcsTe.n Page 5