Mind the Gap Where to Find Gap Funding

Mind the Gap: Where to Find Gap Funding LIHTC Conference September 5, 2013 Shea Hollifield Department of Housing and Community Development

Know Your Gap � Only ask for what is needed to fill the REAL gap � Do not low ball your request - $343, 129 � Do not inflate costs with unnecessary extras � Do not replace other funding sources � Participate in the risk – developer’s fee etc. � Match project objectives to funder’s objectives

DHCD Gap Funding Resources � Virginia loans � HOME Housing Trust Fund – competitive Investment Partnership funds – HUD funds for nonentitlement areas

Virginia Housing Trust Fund � It takes a village to pass a Trust Fund $7 million in 2012 General Assembly $1 million in 2013 General Assembly $8 million Virginia Housing Trust Fund At least 80% to loans Up to 20% for grants

Housing Trust Fund Categories Competitive loans $5, 400, 000 Foreclosure rehab $1, 000 Homeless reduction grants $930, 000 Foreclosure counseling $500, 000 Admin $170, 000

HTF Competitive Loans � Loans for affordable rental housing and homeownership � Alignment with state housing policies, leveraging, long-term affordability, sustainability � Rate and terms determined through underwriting process

Housing Trust Fund Status � 26 foreclosure counseling grants made in conjunction with VHDA’s housing counseling grant process � 5 foreclosure rehabilitation grant applications approved – Trust Stabilization Program (TSP) � 29 competitive loan applications pending � 58 homeless reduction applications pending announcement

Housing Trust Fund Status � Funds � Future allocated only for FY 2014 allocations dependent upon funding from the General Assembly

HOME Investment Partnership � Federal funds from HUD for a range of affordable housing uses � Virginia’s state HOME program: -Affordable and Special Needs Housing -Down payment assistance -Indoor plumbing and rehabilitation – homeowner rehabilitation

HOME funding – Virginia Program $16 000 $14 000 $12 000 $10 000 $8 000 $6 000 $4 000 $2 000 $0 2009 2010 2011 $14, 201, 692 $14, 170, 610 $12, 404, 080 2012 $7, 258, 158 2013 $6, 796, 346

HOME – Affordable and Special Needs Housing � Competitive quarterly application process � Typically used as gap financing � Structured as interest-only loans at 3% for 15 to 20 years. Principal due at end of affordability period. Can enter into an extended compliance period for principal forgiveness at end of term

HOME – Affordable and Special Needs Housing � Funds decreasing � Increasingly competitive application process � Priority given to: -Projects in nonentitlement areas -Community Housing Development Organization(CHDO) projects -Exceeding 504 requirement -Green building approaches

Shea Hollifield Department of Housing Community Development 804 -371 -7031 shea. hollifield@dhcd. virginia. gov