In its March meeting, the Michigan State Housing Development Authority (MSHDA) Board approved the issuance and sale of revenue bonds to be used to provide down payment assistance (DPA) loans to Michiganders while also approving a new gap financing program and funding for affordable housing projects in Grand Rapids, Flint, and St. Clair.
The Board authorized the issuance of up to $400 million in Single-Family 2023 Series A and B Revenue Bonds. The proceeds from sale of the bonds will fund single-family mortgages at a lower than current market rate and make homeownership more attainable through down payment assistance. These funds will impact low- and moderate-income individuals and families across the state, paving the way toward accessible affordable and attainable housing.
“Creating equitable, attainable pathways to homeownership for all Michiganders starts with investing in the resources that help lower barriers to homeownership – like down payment assistance,” said Amy Hovey, executive director of MSHDA. “Everyone deserves equal opportunity to achieve the dream of homeownership, and these investments further MSHDA’s goal to make that dream a reality.”
In other action, the MSHDA Board approved the program statement for an Affordable Housing Tax Credit Gap Financing Program. The program provides $150 million of gap funding through four key program areas to enable affordable housing developments to be constructed or rehabilitated, which will increase the supply of affordable housing throughout the state. The funding will primarily take the form of grants or subordinate, forgivable loans, which are necessary to fill the funding gaps in rental development projects.
Fifteen percent of the program’s total funding will be reserved for properties in rural communities as designated by the United States Department of Agriculture and Rural Development.
The Affordable Housing Tax Credit Gap Financing Program will provide gap funds in the following ways:
• $57 million for a Pass-Through Gap Financing Program for New Construction or Adaptive Reuse Developments
• $21.375 million for a Pass-Through Gap Financing Program for Existing Tax Credit Developments
• $28.5 million for 9% Low-Income Housing Tax Credit (LIHTC) Gap Financing
• $35.625 million for Direct Lending Gap Financing
“The program presents a significant opportunity to aid in the implementation of Michigan’s first Statewide Housing Plan by reducing housing cost burdens on Michigan residents, increasing the supply of affordable housing, and preserving the existing supply of affordable housing,” said Chad Benson, MSHDA rental development director. “Throughout the state, the need for substantially more affordable housing exists, but the lack of adequate funding necessary to create more has caused demand to outpace the supply and housing to become less affordable.”
“We thank the Whitmer Administration and the Legislature for recognizing the challenges we face and approving this funding to help us fill the gap,” Hovey added.
Additionally, the board authorized a loan of $5.25 million for the acquisition and rehabilitation of 56 senior housing units for new residents at Academy Manor Senior in Grand Rapids. The rehabilitation of the existing, unoccupied units includes upgraded appliances, the addition of high efficiency central heating and air conditioning, and creation of a community room. Sixty percent of the units will be reserved for tenants at 60% of the Area Median Income (AMI), and 10% of the units will be reserved for tenants at 40% of AMI.
Lake Huron Woods Phase 2 Cottages was also approved for a tax-exempt mortgage loan and a Mortgage Resource Fund mortgage loan totaling $13.28 million to construct 45 cottages for senior occupancy, consisting of 24 affordable units and 21 market rate units. Each cottage will be equipped with an array of amenities, such as a single car attached garage, microwave, dishwasher, self-cleaning oven and personal emergency response fob.
The MSHDA Board also approved a mortgage loan of $40.23 million for Lakewood, a new construction project in Holland Charter Township that will create 190-units, 146 of which will be designated as affordable housing units. The development will include six residential buildings, a three-story mixed-use building, and a one-story office/amenity space building.
