The proposal by an Illinois-based development firm to use Katrina-related federal tax credits to develop the former Pinewood motel property on U.S. 80 into 75 houses for low-income wage earners was rejected Friday when the agency charged with approving them ran out of credits.

Applications for four others proposed for Vicksburg were also thrown out, absent from a list of 25 developments in 22 locations approved for $23.4 million in housing tax credits related to the Gulf Opportunity Zone Act of 2005.

The Mississippi Home Corporation, a quasi-state agency in charge of home financing by administering the Home Tax Credit program, awarded the credits to developers. The GO Zone legislation pumped up the per-capita funding for such developments from $1.90 to $18, creating a flurry of activity by developers wanting a piece of the action.

Statewide, 117 applications were filed with MHC.

Jim Bergman, principal partner of Illinois-based DD Development of Sterling Inc., had been confident about the chances of getting approved for the credits. He did not return calls Friday.

The developments were graded and approved on a 105-point grading system that credited them on whether the developer followed certain guidelines both required and optional.

&#8220It was a very competitive process,” said Scott Spivey, vice president of corporate communications for MHC.

An emphasis on building near the devastated Gulf Coast, where MHC estimated almost 6,000 rental units were destroyed by the storm, was a partnering factor in approving the applications, Spivey said.

&#8220We placed a priority on developing near the coast,” he said of the 10 developments near the coast that were approved, adding that no other applications will be approved for 2006, Spivey added. Developers can re-apply for tax credits in 2007 and 2008, he said.

The other four proposed developments in Vicksburg included one next to the Pinewood, by an Arkansas company.

Another proposal was planned to refurbish Circle Lake Apartments on Hope Street, but it did not meet minimum requirements for approval, MHC said.

Two more included one in the vicinity of the Danawood subdivision by a Monroe, La. company and one along South Frontage Road.

The lead developer of the proposal near Danawood, Jim Brockman, was approved for nearly $600,000 in credits for The Colonnades in Ocean Springs. Verlyn Foley, principal of the South Frontage Road proposal, received nearly $2.8 million in credits for two separate developments approved for Gulfport.

Warren County was one of 49 counties in Mississippi in the zone and thus eligible for individual or public assistance.

The legislation was geared to spur economic development in areas of Louisiana, Mississippi, Alabama, Texas and Florida devastated by hurricanes last year. It also contains tax incentives and tax free revenue bonds for businesses that locate in the zone or existing ones that made improvements.

Opposition sprang up by citizen groups and elected officials along the northern periphery of the GO Zone in Mississippi. Most notable was a lawsuit filed by citizens in Lowndes County against the MHC and a letter signed by 37 mayors of cities such as Columbus and Meridian opposing the developments.

Another $4.9 million in housing tax credits were awarded by MHC, part of an allocation the agency awards every year. Those were in Horn Lake, Greenwood and Grenada.