A state agency recently awarded $97 million in tax credits, loans, bonds and grants to help finance six affordable- housing projects on O'ahu, Maui and the Big Island.

The financing will help nonprofit developers build 486 units, a handful of which are to be made available to needy tenants for free.

The awards, made by the Hawai'i Housing Finance and Development Corp., represent the agency's first of two annual award periods during which private developers compete for state and federal financing to produce low-income housing.

A follow-up award this year should disburse about $23 million, including a one-time $15 million infusion to the program approved this month by the Legislature, to help further ease Hawai'i's affordable-housing crisis inflamed by the doubling of home prices over the past five years.

Among the recently distributed awards were $38 million in federal low-income housing tax credits with a $19 million state tax credit match, $26 million in loans and grants from a state rental housing trust fund, $8 million in Hula Mae bond financing, and $4 million in federal tax-exempt bonds with a $2 million state bond match.

Under terms of the financing, all projects funded must be completed by the end of 2009, and the tax credits can be claimed over 10 years.

The program seeks to serve the greatest number of low-income residents through a competitive project application process, though the state can favor projects serving a particular need such as senior rentals.

"We're looking for the greatest bang for the buck," said Darren Ueki, agency finance manager.

The tax credits help nonprofit developers raise money by allowing them to sell the credits to investors who typically pay 75 cents to 90 cents for each $1 credit and can redeem credits over 10 years. The credits are transferable and have value to the investors because they can use them to reduce their own tax liability.

The federal government limits its amount of tax credits available to the state annually based on population, or $1.95 per resident. The state provides a 50 percent match to the federal credits.

The state agency also contributes money to the affordable-housing program from its rental housing trust fund, which is primed by a share of conveyance taxes paid on property sales.

Grants from the fund are typically reserved for projects serving tenants earning no more than 30 percent of the median income. Loans help cover project expenses and are repaid from operating revenue, though often a portion of a loan is forgiven and used for reserves or developer fees.

"Without the trust fund program, you wouldn't be seeing low-income rentals being built," Ueki said.

The program was largely reconstituted last July when the Legislature formed Hawai'i Housing Finance and Development after dissolving another agency that was charged with developing affordable housing and managing public housing projects.

Prior development efforts were constrained because lawmakers raided $212 million in various affordable-housing funds between 1995 and 2005. Also, the agency's predecessor concentrated efforts on correcting years of public housing neglect. A separate agency now manages public housing.

Hawai'i Housing Finance and Development last year got a boost to its rental trust fund when the Legislature increased the share of conveyance taxes going into the fund from 30 percent to 50 percent for one year.

Last week, the Legislature passed a bill that will extend for another year the 50 percent funding level, which is projected to generate $14 million more than at 30 percent.

Lawmakers rejected the initial aim of the measure, Senate Bill 1917, to give the trust fund 65 percent of conveyance taxes in perpetuity, which would have meant an estimated $25 million annual boost to the fund.

Janice Takahashi, the agency's chief planner, said a request will be made next year for the Legislature to maintain or raise the funding level.

Another proposed increase for the trust fund this year was a $50 million budget appropriation spread over two years.

But that measure upon passage last week was amended to deliver $15 million in the next fiscal year only.

"We're disappointed we didn't get the full package, but we were happy to get something," Takahashi said.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.