(Washington, DC) – Today, Mayor Muriel Bowser announced that the U.S. Department of Housing and Urban Development (HUD) approved the application submitted by the Department of Housing Community Development (DHCD) for a Section 108 loan guarantee of $38,800,000 to create a revolving loan fund that will provide third party loans for the preservation of hundreds of affordable housing units.
“We thank President Biden and his Administration for approving this investment in much-needed affordable housing for DC residents. Building back better and ensuring an equitable recovery means working together across every level of government to meet the needs of those who have been hit hardest by the pandemic and the economic crisis it caused. We know that for many Washingtonians, access to safe and affordable housing is the first step to getting back on their feet,” said Mayor Bowser. “As we continue through our response and recovery, this funding will allow us to double down on our ongoing housing efforts, protect DC’s stock of affordable housing, and give more Washingtonians a fair shot.”
The Section 108 loan fund will be used for the acquisition and rehabilitation of existing housing where affordability will be preserved for households at income levels no greater than 80% of the Median Family Income (MFI), or about $100,000 for a family of four.
“Mayor Bowser has challenged our team to look at all possible ways for the District to make more progress toward our bold goal to not only create 36,000 new units of housing by 2025, 12,000 of them affordable, but also to preserve every unit of affordable housing we currently have,” said Deputy Mayor for Planning and Economic Development John Falcicchio. “HUD’s approval of our Section 108 revolving loan fund application will enable us to deploy a critical new tool that will help us continue to provide pathways to the middle class and change the trajectory for District residents for years to come.”
The first group of projects to be considered will be from DHCD’s current pipeline that were selected from the 2019 Request for Proposals (RFP), but for which DHCD did not have immediate funding resources to close. This group of preservation projects is anticipated to include over 130 affordable units reserved for households earning no more than 50% of MFI. The second group of projects to be considered for Section 108 funding will be projects from the 2019 RFP round that were previously not selected due to resource limitations.
“Even with the largest per capita Housing Production Trust Fund among cities, and a first of its kind Housing Preservation Fund, we need federal investments to achieve our goals” said DHCD Director Polly Donaldson. “With the Section 108 loan fund approval, we can continue the important work of bringing projects in the pipeline, and others waiting in the wings, to fruition at a time when preserving affordable housing in DC is more critical than ever.”
The Section 108 Loan Guarantee Program provides Community Development Block Grant (CDBG) recipients with the ability to leverage their annual grant allocation to access low-cost, flexible financing for economic development, housing, public facility, and infrastructure projects. Communities can use Section 108 guaranteed loans to either finance specific projects or to launch loan funds to finance multiple projects over several years.