HUD released a new guide to assist state and local governments in utilizing HUD’s Community Planning and Development (CPD) funds to increase their supply of new affordable homes, including affordable housing developments financed by the Low-Income Housing Tax Credit program.
The guide highlights various financing tools that can be funded through HUD’s annual CPD programs, including CDBG and HOME, such as low-cost bridge loans that can help developers access short-term loans with improved terms to cover development costs until they secure permanent financing; long-term forgivable or low-cost cash flow loans that may be used as permanent sources in a development; and government-provided operating subsidies that can increase a development’s ability to leverage conventional financing by boosting its net operating income.
Additionally, the guide describes federal programs and tax credits that may be paired with annual CPD funds to boost the housing supply, such as New Market Tax Credits and tax-exempt bonds.
(Source: Enterprise Foundation)