A housing and housing development initiative has been announced.
The Delaware State Housing Authority will use American Rescue Plan Act funding to develop the Catalyst Fund with the goal of preserving affordable homeownership opportunities through the acquisition and rehabilitation of vacant homes in Delaware’s neighborhoods. The funds will be administered in partnership with Cinnaire, a certified Community Development Financial Institution that offers lending options for community development construction.
Cinnaire will offer construction lending by leveraging ARPA funds to incentivize for-profit and nonprofit developers to purchase, renovate, or replace vacant and blighted properties. The for-profit or nonprofit developer will receive ARPA funding as part of their construction project financing so that the cost of the new or rehabilitated home remains affordable to low-income residents. The program is expected to under way this summer.
The Market Pressure Relief Fund – expected launch this summer – will provide additional financing to owners of affordable multifamily rental projects currently under construction that have faced construction cost increases due to supply chain disruptions and inflation.
The Accelerator Fund will provide an incentive to market-rate rental developers with planned construction projects to provide affordable rental units in their new or renovated properties. The developer will receive an upfront payment from DSHA, funded which will offset construction costs. As part of the funding agreement, the developer will commit to an affordable monthly rent for a specified number of units in a project that would otherwise be exclusively market-rate. This new program will also provide additional funds for traditional affordable rental developers that qualify for the federal Low-Income Housing Tax Credit. The program is expected to get underway in the fall.
The Preservation Fund, which is expected to launch in spring 2023 will offer financial incentives to ensure nearly 1,000 existing affordable rental units eligible to convert to market-rate instead remain in the affordable rental inventory.
“We are investing in affordable housing development across our state so that more Delaware families have access to safe, affordable housing,” said Gov. John Carney. “We are using ARPA funds to make sure these affordable housing construction projects get through the finish line, support more Delawareans in becoming homeowners, and revitalize communities that were hit hard by the Covid-19 pandemic. Thank you to members of our federal delegation and President Biden for providing these important resources through the American Rescue Plan Act.”
DSHA and its partners will host public meetings to gather feedback from the community and stakeholders before launching these new programs. The first meeting will focus on the Catalyst Fund and will take place the week of July 25. The purpose of the meetings is to ensure that the programs are designed to best meet the goal of increasing the availability of affordable housing in Delaware. More information, including upcoming meeting dates and program details, will be posted on destatehousing.com.
