Many states have adopted programs and initiatives to tackle the affordability crisis. In Florida, policymakers and the housing industry have made concerted efforts to address the problem. Examples include:
State Apartment Incentive Loan
The State Apartment Incentive Loan program (SAIL) provides low-interest loans on a competitive basis to affordable housing developers each year. The loan often bridges the gap between a developer’s primary financing and the total cost of development. SAIL is available to individuals, public entities, not-for-profit or for-profit organizations that propose the construction or substantial rehabilitation of multifamily units affordable to very low-income individuals and families.
The Housing Credit (HC) program provides for-profit and nonprofit organizations with a dollar-for-dollar reduction in federal tax liability in exchange for the substantial rehabilitation or new construction of low and very low income rental housing units. This program can be used in conjunction with the HOME Investment Partnerships program, the State Apartment Incentive Loan program, the Predevelopment Loan program, or the Multifamily Mortgage Revenue Bonds program.
HOME Investment Partnerships Program
The HOME Investment Partnerships Program provides non-amortized, low-interest loans to developers for acquisition and/or new construction or rehabilitation of affordable rental housing to low income families. Loans are offered for the financing of first or subordinate mortgages with a simple interest rate of zero percent to nonprofit applicants and 1.5% per annum interest rate to for-profit applicants. Loan terms are generally for 15 years for rehabilitation and 20 years for new construction.
Predevelopment Loan Program
Through individualized technical assistance and flexible below market interest financing for predevelopment activities, the Predevelopment Loan Program (PLP) helps nonprofit and community based organizations, local governments, and public housing authorities plan, finance, and develop affordable housing. Eligible organizations may apply for a loan of up to $750,000. The loan carries a non-amortizing one percent interest rate, with principal and interest deferred until maturity. The loan generally matures either upon the closing of construction/permanent financing or three years after the original PLP loan closed, whichever occurs first.
Multifamily Mortgage Revenue Bonds Program
The Multifamily Mortgage Revenue Bond program (MMRB) uses both taxable and tax-exempt bonds to provide below market-rate loans to non-profit and for-profit developers who set aside a certain percentage of their apartment units for low income families. These bonds are sold through either a competitive or negotiated method of sale or private placement. The program requires that at least 20 percent of the units be set aside for households earning at or below 50 percent of the area median income (AMI). The developer may also opt to set aside 40 percent of the units for households earning at or below 60 percent of the AMI.