Governor Tony Evers has announced a new fund for the development of affordable housing throughout the state of Wisconsin. Together with Wisconsin Housing and Economic Development Authority (WHEDA) CEO and Executive Director Elmer Moore Jr., Gov Evers revealed the $20 million investment to provide funding to help fill financing gaps for affordable multifamily developments that received 2020 and 2021 federal or state housing tax credits. Several developments have experienced difficulties in obtaining enough financing as the cost of materials and labor has risen rapidly from inflation.
“I often talk about connecting the dots and affordable housing is one of the most important dots we can connect,” said Gov. Evers. “Affordable housing links business growth, job creation, and education, and it’s good for our workforce, our kids and families, and our seniors. This is a critical investment that will help more folks have access to safe, affordable housing while bolstering community well-being throughout our state.”
Funded by the American Rescue Plan Act (ARPA), WHEDA will use the $20 million investment to create a new grant program for developers to help fill shortages for multifamily housing tax credit projects that have serious funding gaps. The investment is projected to develop approximately 1,800 affordable rental units throughout the state as WHEDA works directly with developer partners to allocate grant funds on a project-by-project basis.
On average, developers that receive tax credits must provide at least 85 percent of a building’s apartments at below-market rents to people earning no higher than 60 percent of the local median income. Developers sell those tax credits – often to banks and other investors – to raise capital for their projects. Most of the additional funds provided come from commercial loans. Despite this, it is still not unusual for financial gaps to exist for affordable housing projects. Using the new state fund, provided by ARPAt, these gaps will be covered.