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Affordable Housing in Nebraska. Pat Compton – Housing Development Specialist DEPT OF ECONOMIC DEVELOPMENT [email protected] Housing Funding Sources. Community Development Block Grant—CDBG HOME Partnership Act funds—HOME Nebraska Affordable Housing Trust Fund--NAHTF.

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Affordable housing in nebraska
Affordable Housing in Nebraska

  • Pat Compton – Housing Development Specialist


  • [email protected]


Housing funding sources
Housing Funding Sources

  • Community Development Block Grant—CDBG

  • HOME Partnership Act funds—HOME

  • Nebraska Affordable Housing Trust Fund--NAHTF

Eligible activities
Eligible Activities

  • Build new rental units for persons that are low to moderate income.

  • Adapt a building from another use such as an old school or hotel to rental housing.

  • Rehabilitate an existing rental property owned by a non-profit or Public Housing Authority to meet local building codes and DED Rehabilitation Standards.

Eligible activities cont
Eligible Activities (cont)

  • Administer a homebuyer assistance program.

  • Develop new single family housing for home ownership, including infrastructure.

  • Purchase homes, rehabilitate to meet local building codes and DED Rehabilitation Standards and provide down payment assistance to a new homebuyer to purchase the homes. (PRR)

Eligible activities cont1
Eligible Activities (cont)

  • Administer a program to assist homeowners in rehabilitating their houses.

  • Strengthen the operations of non-profit organizations to develop affordable housing.

American dream
American Dream?

  • Homeownership not for everyone:

  • Rental may be best option because:

    • Bad credit

    • Job moves to different locations

    • Future not known

    • Don’t want the upkeep

    • Income does not support ownership

Rental with tax credits
Rental With Tax Credits

  • Larger projects of more than 10-12 units

  • Application for DED funding is included with LIHTC application

  • Applications due in the fall

  • Income eligible tenants at 60% AMI and below

Rentals without tax credits
Rentals Without Tax Credits

  • DED funding cycle begins in Febr. with Pre Ap

  • Awards announced after June 30

  • ROF in the fall

  • Sustainability depends on debt, expenses, revenue

  • Funding sources may include DED; FHLB; Private Foundations; Capital Campaign Fund

Rural community commonalities
Rural Community Commonalities

  • Population does not support need for larger LIHTC projects

  • Capital investment limited

  • Empty buildings may be available but uncertain condition

  • Few housing choices available

  • Labor force may be temporary/commute elsewhere

Rental units developed w o lihtc
Rental Units Developed w/o LIHTC

  • Income eligibility-80% AMI or below

  • First steps

    • Determine market, need, location/service area, budget

    • Determine financing sources

    • Who’s in charge—create the


      • Lender, developer, architect,

        engineer, construction mngr

Variety of approaches to satisfy housing need
Variety of Approaches to Satisfy Housing Need

  • New Construction

    • Single family housing units—scattered sites

    • Duplex

    • Multifamily – up to 10 units

  • Existing building

    • Purchase; convert to rental by rehabilitation

    • Non profit ownership of rental

      properties—rehab to fit market:

      1 br > 2 br; 2 br > 1 br; ADA accessible

You may need a developer for
You May Need a Developer for

  • Creating the development concept

  • Testing the market

  • Evaluating site and design and costing out construction

  • Preparing the pro forma income and expenses statement

  • Preparing the sources and uses of funds statement

The developer cont
The Developer (cont)

  • Obtaining the construction financing

  • Locating permanent financing resources

  • Obtaining the construction Loan

  • Constructing the Project

  • Managing the Project during construction

Filling the gap at construction
Filling the Gap at Construction

  • Subsidizing Capital Costs

    • Smaller projects will have greater sustainability with less debt service

    • Monthly operating costs per unit may run approx. $350/mo. (taxes; insurance; maintenance)

  • NEDED AHP funding, FHL Bank AHP funding, USDA-Rural Development programs; private foundations

Filling the gap and serving the customer
Filling the Gap and Serving the Customer

  • Rental Subsidies

    • Consumer pays 30% of income

    • SSI Consumer with income at $715 per month

      • Pays $215

      • Rental Subsidy $185 (Sect 8 voucher)

      • Rental Income $400

      • $350 Taxes/insurance

      • $50/mo Debt Service?

      • Maintenance?

Rental subsidies
Rental Subsidies

  • HUD Section 8 Vouchers

    • Tenant-based – Can be used in any approved housing with the geographic service area of the Public Housing Authority

  • HUD-funded Public Housing Authority Project

    • Project-based – must live in that rental project and tenant must meet the application criteria

  • USDA-Rural Development Project

    • May have project-based assistance

  • Other HUD funded projects (811)

    • Project-based


  • Over estimated market

  • Limited rental assistance (Sect. 8)

  • Mismatched amenities, design.

    services with tenant market

  • Workforce unstable/mobile

  • Vacancies

    • result in decreased revenue and

      failure to cash flow

    • demand improved marketing strategies

    • may result in property deterioration


  • Rental Housing projects need adequate income to operate/cash flow

  • Success depends on:

    • Proven market need

    • Affordable rents

    • Maintenance of property

    • Debt reduction