Google Inc. is cooperating with a division of U.S. Bancorp in setting up a low-income housing fund worth $86 million.

U.S. Bancorp said the fund will help construct and manage affordable rental units in Western and Midwestern states. Some 480 units are expected to be financed by the fund in Milwaukee; Waukegan, Illinois; Apple Valley, Minnesota; Des Moines, Iowa; and Fontana, Palm Springs, and Salinas in California.

The units will comprise one- to four-bedroom apartments. According to U.S. Bank, the apartments will also have a shared laundry and gathering area.

While U.S. Bancorp has been investing in low-income housing projects since 1987, the apartments were their first low-income housing tax credit deal with Google. The lender also praised the Internet giant for providing “fresh capital” to industry.

The latest initiative by Google is part of the federal government’s low-income housing tax credit (LIHTC) program. It earlier joined San Francisco-based Union Bank in investing $25 million into two development projects in California, also as part of the LIHTC.

Companies can receive LIHTC tax credits if they sponsor low-income housing projects. They can then use these credits to settle some of their tax liabilities.

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