Understanding the different requirements for available funding programs and obtaining financing for affordable housing projects is critical to getting them funded and built. CARING Housing Ministries’ proficiency in this area further highlights our depth of knowledge and experience. Not only are we staffed by experts in the field of traditional finance, but we are also well informed of financing structures that vary from state to state and project to project.
Available programs include: resident rental assistance subsidies; tax credits; economic development bonds; and mortgage grants and loans. All of these programs are in return for a 40 to 55 year commitment to low-income housing. We are equally adept at multiple-source financing for one project-a growing trend in funding for affordable housing that could prove tricky for a company less adept at working through the numerous operational issues and regulatory requirements.
Current Financing Products for Affordable Housing Communities
HUD Mortgages and Grants
A wide variety of funds and grants are available through the U.S. Department of Housing and Urban Development to assist with affordable housing. Federal monies are made available on the local and state level, but are not available to individuals and must be coordinated in partnership with an experienced organization like CARING Housing Ministries.
HUD Housing Assistance Payment Contracts (HAP)
HUD/HAP contracts and grants are used for project-based rental assistance, including Section 8 funds. The contract/grant provides subsidies, for affordable, privately owned, multifamily projects to low-income households.
LIHTC/Tax Credit Allocation Committee (TCAC)
The TCAC administers federal and state low-income tax credit programs that were created to encourage investment in affordable rental housing for qualified applicants. Investors are for-profit corporations that receive tax incentives for their investments.
Limited Liability Corporations (LLC) and Limited Partnerships (LP)
Limited Liability Corporations (LLC) and Limited Partnerships (LP) are formed by entities wishing
to invest funds in affordable housing. Funds can come from tax credit investors, housing trust funds, financial gifts and
California Housing Finance Agency (CalHFA)
CalHFA offers low, fixed-rate mortgage products and down payment and
closing cost assistance to provide affordable housing opportunities for developers as well as low-
and moderate-income first-time home buyers.
The Los Angeles Housing Department develops housing policy and supports safe and livable neighborhoods through the promotion, development and preservation of decent and affordable housing.
Community Reinvestment Act (CRA)
The CRA is a statute requiring financial institutions to reinvest deposit
funds back into the communities in which they are located. The funds
are then allocated for affordable housing and allocated and administered through the local community redevelop agencies.
The Community Development Block Grant Program (CDBG)
This federal program, created in 1974 and funded by HUD, provides funding
directly to urban and rural areas for housing and community development
for low- and moderate-income persons.
HOME funds offer the largest federal block grant for state and local
governments. They help create affordable housing for low-income families
development, outreach and program planning and are often used to supplement development and construction costs with multiple partners.