Over the coming months, the U.S. Department of the Treasury (Treasury) is conducting webinars and briefings with states, local governments and nonprofit and private sector entities to discuss how State and Local Fiscal Recovery Funds (SLFRF) can be used to expand affordable housing supply.
They have also published a how-to guide.
New guidance clarifies how states and localities can use SLFRF to make long-term loans to affordable housing developments. Such developments are presumptively eligible if the project meets core requirements under the following programs and incentives:
- National Housing Trust Fund
- Public housing capital fund
- Section 202
- Section 811
- Project-based rental assistance
- Multifamily Preservation & Revitalization Program
- Indian Housing Block Grant
- Indian Community Development Block Grant Program
- Bureau of Indian Affairs Housing Improvement Program
Although more than 600 state and local governments have already budgeted $12.9 billion in SLFRF to meet housing needs and lower housing-related costs, prior guidance was not clear on eligible projects. It also wasn’t clear whether LIHTC projects qualified.
The new Treasury guidance (in partnership with HUD) follows a Housing Supply Action Plan released by the White House in May 2022, addressing the housing supply gap. A major initiative of the plan is to expand existing federal financing to housing projects, including American Rescue Plan Act funds that were issued to state and local governments during the pandemic.
SLFRF can be used to “fully finance long-term affordable loans, including the principal of any such loans,” according to a press release by the Treasury.
The how-to guide published by the Treasury and HUD provides examples of housing deals that use multiple sources of federal funding, including SLFRF.
If you have any questions about how to access State and Local Fiscal Recovery Funds in conjunction with other affordable housing project financing/incentives through your state or city, please contact our affordable housing CPAs by emailing us at firstname.lastname@example.org.
Visit our website to learn more about LvHJ’s affordable housing experience.