The Department of the Treasury announced new guidance designed to increase the ability of state, local, and tribal governments to use American Rescue Plan (ARP) funds to boost the supply of affordable housing in their communities, including through the development of LIHTC properties. Treasury has previously encouraged governments to dedicate a portion of the $350 billion available through the State and Local Fiscal Recovery Funds (SLFRF) toward the development, repair, and operation of affordable housing units. The Guidance released by Treasury today takes two additional steps:
(1) increasing flexibility to use SLFRF to fully finance long-term affordable housing loans, including additional financing for affordable housing projects, including those that would be eligible for additional assistance through LIHTC.
(2) expanding eligible affordable housing uses to further maximize the availability of SLFRF funds for affordable housing. The guidance expands that list to include a wider range of federal programs from multiple agencies, permitting more options for how states and local governments can presumptively use funds for affordable housing. These changes are intended to build on Treasury’s efforts to facilitate the use of SLFRF to leverage other sources of federal funding for affordable housing. In addition, Treasury is updating guidance to clarify that SLFRF funds may be used to finance the development, repair, or operation any affordable rental housing unit that provides long-term affordability of 20 years or more to households at or below 65% of the local area median income.
To further encourage state and local governments to make use of these increased flexibilities, Treasury and HUD also jointly published a “How-To” Guide to help governments easily combine ARP funds with other sources of federal funding. This includes examples of how these flexibilities can help facilitate affordable housing deals using multiple sources of federal funding by combining eligibility for using SLFRF with existing sources of federal financing. Additionally, Treasury will begin to conduct a series of webinars and briefings with states, local governments, and both nonprofit and private sector entities involved in the development and preservation of affordable housing to provide continued engagement on how SLFRF funds can be used to expand the housing supply. NAHMA will keep members updated as additional information and resource opportunities are announced .
To view the SLFRF Final Rule FAQs click here. To view the “How To” Guide click here.