Capital Pool for Affordable Housing Development

Create new or expand existing, pools of capital and make them available on a competitive basis to bridge the funding gap for
affordable housing projects

PRODUCE MORE HOUSING ACROSS THE AFFORDABILITY SPECTRUM

Capital Pool for Affordable Housing Development

Use government-backed debt, low-interest funding, and other sources to establish or expand pools of capital and make them available through competitive application, to fill the shortage of funding for new Low Income Housing Tax Credit projects, and counteract the rapidly increasing cost of housing development in NC. Alternatively, attract outside funds to NC to fill the shortage of funding.

This promising strategy requires investment in:

• New dedicated regional pools
• Operating costs to support administration of new funding pools

Evaluation of Promising Strategy in Initial Target Regions

Learn more about the Investment Map’s selection of Initial Target Regions.

At the statewide level, the NC Housing Finance Agency administers the 9% Low Income Housing Tax Credit and issues a Qualified Application Plan (QAP) each year to set parameters for the competitive application process.

Initiative Capital, the lending arm of the NC Community Development Initiative, offers a suite of products for financing affordable housing projects. Its flagship loan product is subordinate debt for 4% Low Income Housing Tax Credit transactions. It can be used as gap financing.

The limited availability of gap financing continues to slow or stall the development of affordable housing projects in the region. In NC, the 4% Low Income Housing Tax Credit is underutilized – a stronger market for gap financing is needed – but the 9% Low Income Housing Tax Credit is oversubscribed; only about 20% of units receive these credits annually.

Assets: Investment Vehicles for Affordable Housing in North Carolina

Investment Approach: Investment Vehicles for Affordable Housing in North Carolina and NCHFA – 2020 Qualified Allocation Plan (QAP)

Effectively sized and accessible funding pools are created. Metric = # pools created. Metric = % of proposed affordable housing projects funded through pools and LIHTC. Metric = avg % of project cost funded through pools (excluded projects funded through LIHTC).
Funding pools effectively reduce the housing gap. Metric = # of units financed through funding pools. Metric = # of units financed through funding pools and/or LIHTC vs # of units needed. Metric = annual change in # units funded through funding pools.
Starts on new affordable housing increase. Metric = % change in number of new affordable housing starts per year.

The limited availability of gap financing continues to slow or stall the development of affordable housing projects in the region.

Low Income Housing Tax Credit projects can be difficult for rural communities with low density (houses per acre) and limited infrastructure.

Assets: Investment Vehicles for Affordable Housing in North Carolina

Approach: Investment Vehicles for Affordable Housing in North Carolina and NCHFA – 2020 Qualified Allocation Plan (QAP)

Effectively sized and accessible funding pools are created. Metric = # pools created. Metric = % of proposed affordable housing projects funded through pools and LIHTC. Metric = avg % of project cost funded through pools (excluded projects funded through LIHTC).
Funding pools effectively reduce the housing gap. Metric = # of units financed through funding pools. Metric = # of units financed through funding pools and/or LIHTC vs # of units needed. Metric = annual change in # units funded through funding pools.
Starts on new affordable housing increase. Metric = % change in number of new affordable housing starts per year.