program offers loan guarantees for economic development, housing rehabilitation and medium and large-scale development projects. Loans typically range from $500,000 to $140 million, depending on the scale of the project or program. They can be combined with private capital and private financing. Section 108 financing offers some unique benefits, like spreading out project costs over time due to flexible repayment terms, while offering lower interest rates than you can get from non-public debt sources. S ection 202 Housing for the Elderly // This is funded at $678 million, which represents a major increase from the $502 million for fiscal year 2017. This appropriation sets aside $105 million for new Section 202 construction and project-based rental assistance, which represents the first significant amount of new construction funding since 2011. H OME Investments Partnership Program // This program is funded at $1.36 billion, up from $950 million in fiscal year 2017, which represents an increase of more than $400 million and the highest funding HOME has seen in seven years. This program pushes federal
block grant money to state and local authorities to support new low-income housing projects. T he Project-Based Rental Assistance (PBRA) Program // The program will receive $11.5 billion, up from $10.8 billion in fiscal year 2017. PBRA funds Section 8 housing assistance payments to owners of multifamily rental housing. The rental assistance makes up the difference between what a qualifying low-income household can afford and the approved rent for housing in a multifamily project. When PBRA started, the assistance was provided for new construction or the substantial rehabilitation of buildings. Today it’s only eligible with existing housing. While funding is no longer available for new builds, if you own or want to acquire property that’s already approved for Section 8 assistance, you can rely on federal support to remain in place this year. T he Tenant-Based Rental Assistance (TBRA) Program // The program will receive $22.015 billion, up from $20.292 billion in fiscal year 2017, a $1.72 billion increase. TBRA
programs subsidize individual households rather than projects. However, if
you own a rental property with qualifying tenants, the TBRA programs provide guaranteed payments to make up the difference between the amount a household can afford to pay for housing and the local rent standards. Other TBRA programs can help tenants pay for costs associated with their housing, such as security and utility deposits. HUD-supported low-income housing may not be as sexy as the newest high-density mixed-use project, but they certainly can produce a great deal of value.
Public/private projects can be a lucrative opportunity for construction companies, developers and other business providers. Even private lenders can find a seat at the table when it comes to complex capital structures that may need a combination of financing sources. The $1.3 trillion Omnibus Bill is filled with intriguing opportunities, particularly within the Departments of Transportation and HUD. With a little homework, exciting and innovative projects can be brought to life, making a difference both for your organization and for your community. ∞
ABOUT THE AUTHOR
JEFF LEVIN Jeffrey N. Levin is the
founder and president of
Specialty Lending Group and Pinewood Financial, which
together provide a full suite of boutique private real
estate lending services in the Greater Washington, D.C.,
area. Before launching SLG,
between 1993 and 2007, Levin was a co-founder and CEO
of iWantaLowRate.com and a co-founder and president of Monument Mortgage. Levin is a recognized authority,
lecturer and panelist and is
also a member of the American Association of Private
Lender’s Education Advisory Committee. He earned a bachelor’s degree from
The American University in Washington, D.C.
MAY/JUNE 2018
13