On Wednesday, August 27, the Treasury Department announced updates to its guidelines for using the State and Local Fiscal Recovery Funds (SLFRF) to augment the Administration’s “Housing Supply Action Plan” by adding flexibility within the program for uses aimed at increasing the affordable housing supply in the country. The SLFRF comes from the American Rescue Plan, which allocated $350 billion for state, local, and tribal governments to support COVID-19 response and recovery actions. The Treasury Department previously released an outline of approved uses for the funds, determining that programs targeted toward increasing the supply of affordable housing are responsive to the COVID-19 pandemic and thus may be an eligible use. Those regulations stipulated that the funds may be used to provide housing services, including the development of affordable housing to increase supply to communities that were disproportionately impacted by the pandemic; addressing housing insecurity; lack of affordable housing; and homeownership. These services include production, rehabilitation, and preservation of affordable rental housing and in some cases affordable homeownership units, as well as down-payment assistance and homeownership assistance that would be eligible under the Community Development Block Grant (CDBG) program. In addition, affordable housing and development projects that increase the supply of long-term affordable housing for low-income residents can qualify for SLFRF funds, if they are eligible under either the National Housing Trust Fund or the HOME Investment Partnership Program (HOME). The National Housing Trust Fund and the HOME Investment Partnership Program are under the Department of Housing and Urban Development (HUD).
The Treasury’s update gives states, localities, and tribal governments increased flexibility to use the SLFRF to fund long-term affordable housing loans, including those that would be eligible for additional assistance under the Low Income Housing Tax Credit (LIHTC). It also expands the list of eligible uses beyond the CDBG, HOME, and National Housing Trust Fund programs, to include many more programs from multiple federal agencies – including the Public Housing Capital Fund, Multifamily Preservation & Revitalization Program, and affordable housing projects that would be eligible under the Indian Housing Block Grant. The updates also clarify that SLFRF funds may be used to finance the development, repair, or operation of any affordable rental housing unit that provides long-term affordability of 20 years or more to households at or below 65% of the local area median income.
The Treasury Department and HUD have jointly published a “How-To” Guide for governments to assist them in combining the SLFRF funds with other sources of federal funding, which includes examples of ways to combine multiple sources of federal funding, including SLFRF, to facilitate affordable housing deals. As of March 2022, $12.9 billion in SLFRF funds have already been budgeted to meet housing needs and lower housing-related costs, including $4.2 billion for affordable housing development and preservation. NAR CEO Bob Goldberg will meet with Administration officials in August to talk more about this update and the White House’s “Housing Supply Action Plan”, and to work together toward a solution to the nation’s housing supply and affordability challenges.
For more resources and information on NAR’s work to end the housing supply and affordability crisis, the SLFRF, and the Administration’s Housing Supply Action Plan, please visit:
- NAR Research Group Report: The “Double Trouble” of the Housing Market
- NAR and the Rosen Consulting Group: Housing is Critical Infrastructure: Social and Economic Benefits of Building More Housing
- U.S. Department of the Treasury: Coronavirus State and Local Fiscal Recovery Funds
- NAR News Release: NAR Commends Treasury Department for New Action on Housing Affordability
- White House: Housing Supply Action Plan