Applications outpace availability of National Housing Trust Funds
July 02, 2021
High demand for funds to support creation of extremely low-income housing
MADISON – Affordable housing developers throughout Wisconsin have submitted applications for National Housing Trust Funds totaling $5.5 million to fund a total of 533 low-income and affordable workforce housing units.
The Wisconsin Housing and Economic Development Authority, which administers the federal program as well as federal and state housing tax credit programs, anticipates a total of $1.3 million will be available. Seven developers in Ashland, Brown, Dane, Fond du Lac and Milwaukee counties submitted the proposals.
“The National Housing Trust Funds fill gaps in the financing for the units that serve community members with extremely low incomes and often other challenges, said WHEDA CEO Joaquín Altoro. “The low-income units are typically integrated in projects with affordable workforce housing, making these projects essential in supporting employment growth. We will be evaluating the applications in the weeks ahead on a competitive basis to maximize the community impact. We’ve not seen this level of demand in past rounds.”
Projects eligible for the National Housing Trust Funds include those that received 2020 or 2021 federal 9% or federal 4% and state 4% housing tax credits. The Housing Trust Fund financing is intended to expand the number of units available for households at or below 30% of area median income.
Funding applications are scored based on criteria including geographic diversity, affordability, priority housing needs and the use of other non-federal funding resources.
The financing takes the form of low-cost, subordinated debt. Since the first federal allocation of housing trust funds in 2016, WHEDA has awarded nearly $11 million to help advance 144 units that might not have been possible without this funding source. There is no minimum dollar amount for financing requests.
The federal program is funded by a portion of a 0.042% fee on Fannie Mae and Freddie Mac activity to guarantee loans and create mortgage-backed securities.
For more than 48 years, WHEDA has worked to provide low-cost financing for housing and small business development in Wisconsin. Since 1972, WHEDA has financed more than 78,000 affordable rental units, helped more than 135,000 families purchase a home, and provided more than 29,000 small business and agricultural loan guarantees. WHEDA is a self-supporting public corporation that receives no tax dollars for its operations. For more information on WHEDA programs, visit wheda.com or call 800-334-6873.