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Gap Financing Tools for Affordable Housing

Gap Financing Tools for Affordable Housing. A presentation to the Virginia Housing Coalition Housing Credit Conference September 5, 2013. VHC Sept 2013. APAH: A Non-Profit Affordable Housing Developer. Owns 1,117 rental homes at 13 properties valued at $200M Award-winning, innovative

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Gap Financing Tools for Affordable Housing

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  1. Gap Financing Tools for Affordable Housing A presentation to the Virginia Housing Coalition Housing Credit Conference September 5, 2013 VHC Sept 2013

  2. APAH: A Non-Profit Affordable Housing Developer • Owns 1,117 rental homes at 13 properties valued at $200M • Award-winning, innovative • Founded in 1989 • Led by Arlingtonians: Staff & Board • Most properties funded by: • LIHTC • VHDA Financing • Arlington County Gap Financing • Low Cost Land Acquisition

  3. Major Arlington County Affordable Housing Tools • AHIF: Affordable Housing Investment Fund • Affordable Housing Ordinance produces on-site units and AHIF contributions • Density— Rezoning, Bonus, • Transfer of Development Rights • Public Land for Housing, land banking, faith community land • Bonds: Industrial Development Authority • Housing Grants: rental subsidy • Permanent Supportive Housing: rental subsidy and services

  4. Focus: Affordable Housing Investment Fund (AHIF) • Revolving fund est. 1985 • Target 60 years affordability • Target leverage 4:1 with other funds • 5 – 10% supportive housing • Repaid from cashflow, typ. 50% • Preference for below market fees, acquisition costs • Funded with Federal HOME funds, local general revenues, 1% of County recordation tax, loan repayments and developer contributions under Affordable Housing Ordinance

  5. Advocacy and Information: Important Development Tools • APAH and partners (eg the faith community), publicize challenges facing low income households, like loss of affordable units • County elected officials make affordable housing a top goal. • Leadership facilitates funding, policies and approvals County lost 14,000 market affordable units between 2000 - 2011

  6. Federal Affordable Housing Tools • HOME Investment Partnership Program • Pass Thru To States/Localities • $2B/year • 25% Local Match • Build or renovate, 20 yr term • Part of Consolidated Plan • Section 8 Rental Subsidy • Community Development Block Grants (CDBG)—housing & services for low income

  7. Focus: Density • Rezoning: Strategic rezoning to allow more affordable units • Bonus density allowing larger buildings in exchange for on-site affordable units and/or contribution to AHIF • Density Transfer allows density to be transferred to an affordable site or sold to help finance preservation of existing units

  8. Focus: Public Land for Housing • Pioneered with long term ground lease at Arlington Mill Community Center • Leverages height and density with other County uses • Significantly reduces development costs for acquiring new land

  9. Fairfax County 2014 Funding • $5 million in Housing Blueprint funds • Focus: Extremely low incomes, particularly homeless or disabled (20% of units serve at or below 30%AMI); Low income working families (60% of units serve at or below 50% AMI); and Moderate income workforce (20% of the units serve between 51%AMI and 100%AMI) • Leverage other sources such as private equity and financing and Low-Income Housing Tax Credits (LIHTC)

  10. Alexandria Housing Opportunities Fund • Development and preservation of affordable rental and sales housing. • Priority to City-certified Community Housing Development Organizations (CHDOs). • Leverage funding from all available sources--fill gaps. • Low interest loans or grants serving below 60% of the area’s median income. • May cover feasibility analysis; pre-development activities; housing preservation; and development costs.

  11. Prince William County Funding • $500,000 in CDBG Funds awarded competitively to non-profit organizations • Maximum award $225,000 • Public service grants at 100%/50%/25% annually • Repayable loan at zero interest or deferred appreciation

  12. Other Affordable Housing Tools • Leverage • Private or bond mortgage financing • HUD Loan Programs • Land Banking • Non-profit-owned garden apts. • Faith community • Philanthropy • Private contributions & grants • Volunteer support • Historic Tax Credits • Federal (20%) and state (25%) of eligible rehabilitation costs

  13. Focus: Land Banking • Redevelop existing, older, low density garden apartment communities or faith properties in transit-oriented locations • Lower development costs because of existing non-profit ownership • Rezoning provides more affordable units and can create new Smart Growth, energy-saving and Transit Oriented features

  14. Our Vision A diverse and inclusive, transit-oriented, sustainable community that welcomes and values all residents. Our Role Marry best practices in affordable housing finance and development with a deep commitment to the local community to advocate, preserve, and build affordable housing . Nina Janopaul, APAH President/CEO 703-276-7444 (w)

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