Financing Tools

Financing Options

We have four resources available to finance the creation or rehabilitation of affordable housing, redevelopment, and other community development initiatives in Washington County. Please review the following finance options and contact our development team for additional information.

 

1. Low-Income Housing Tax Credit ­

The Low Income Housing Tax Credit (LIHTC) program is the key financial tool to raise private equity for the construction or rehabilitation of affordable rental housing. The Washington County HRA is the legal sub-allocator of the tax credits for our county.

 

Credits are awarded based on criteria and procedures set forth in the Qualified Allocation Plan (QAP) and Procedural Manual, which are subject to approval by the Washington County CDA Board of Commissioners. Approval is anticipated in May. Those interested in applying should read the following documents:

 

Tax Credit Comparisons

 
 

9% Tax Credit Program

4% Tax Credit Program

Eligible Applicants

Experienced and qualified private and nonprofit developers.

Experienced and qualified private and nonprofit developers.

Eligible Uses of Funds

Cost of new construction or rehabilitation of affordable rental housing.

Cost of new construction, building acquisition and rehabilitation of affordable rental housing.

Eligible Occupancy

Households at or below 60% of the Area Median Income with rental tenancy.

Households at or below 60% of the Area Median Income.

Amount of Funding

Based on IRS formula of county population times a dollar amount. Approximately $550,000.   

Based on a calculation of eligible development costs and a minimum threshold of tax exempt bonds of at least 50% of total development costs.

Deadline for Application

Generally applications are due in June of each year.  Please check Procedural Manual for the exact date.

No deadline, but credits cannot be allocated unless tax-exempt revenue bonds are approved and allocated from the state volume cap to the development.

 

2. Tax-Exempt Bonds

We are authorized to issue tax-exempt and taxable revenue bonds for multi-family housing and facilities projects. The CDA acts as a conduit issuer that sells bonds to private or nonprofit developers or a municipality that use the proceeds to finance a community building project. Because they are exempt from federal taxes and in certain cases state taxes, tax-exempt bonds are usually the lowest interest rate option for real estate projects and new equipment purchases. Tax-exempt bonds can be sold in the capital markets or directly to your bank or another financial institution.

 

Projects financed must be eligible for tax-exempt financing under the federal tax code and include:

 

  • 501(c)3 nonprofit real estate and equipment
  • Affordable rental housing
  • Assisted living and long term care facilities
  • Public infrastructure projects
  • Manufacturing facilities and equipment
  • Municipal and governmental projects

 

For information on Tax-Exempt Bonds, view the following documents below or contact our development team.

 

 

3. GROW Fund (Gap Financing for Redevelopment and Rental and Owner Occupied Housing in Washington County)

The GROW Fund is a financing tool to fill remaining funding gaps in rental and owner-occupied housing proposals affordable to modest income households that are in city and township-initiated redevelopment projects in Washington County. The Washington County HRA approves GROW fund loans on an ongoing basis.

 

To learn more about the GROW fund, review the GROW Fund Guidelines and Application Form and contact our development team.

 

4. Tax Increment Financing

The Washington County CDA has the ability and authority to establish site-specific tax increment financing (TIF) districts throughout the county. If you are interested in creating a TIF district, qualifying projects are typically for housing, redevelopment, infrastructure and other public community improvements. The HRA uses tax increment financing to accomplish these major objectives:

 

  • Increase the property’s tax base and maintain its diversity. Clean contaminated land to provide sites for uses that achieve local redevelopment objectives.
  • Provide an array of housing choices that meet the needs of current residents and attract new residents to Washington County, with an emphasis on providing affordable housing.
  • Eliminate blighting influences throughout the county.
  • Support neighborhood services, commercial corridors and employment hubs.

 

For information about creating and establishing a tax increment financing district in Washington County or to learn more about this financing option, please contact a member of our development team.

 

Case Study: Red Oak Preserve

Red Oak Preserve is a master-planned neighborhood located in the city of Oakdale. The CDA owned a manufactured home park which had significant infrastructure problems. The property was redeveloped in a holistic manner to meet needs of existing residents while resolving the health and safety issues posed by the aging infrastructure. The CDA and partners developed an overall land use vision that created a neighborhood with five life cycle housing options:

 

    • Affordable rental townhomes (29 units constructed by Red Oak Preserve LLC).
    • Affordable owner occupied townhomes (20 units constructed by Habitat for Humanity).
    • Affordable owner occupied single family detached homes (5 units constructed by Two Rivers Community Land Trust).
    • Affordable senior housing apartments (39 units constructed by Red Oak Preserve LLC).
    • Market rate owner occupied single family detached homes (33 units constructed by national home builder, Ryland Homes).

 

The Red Oak Preserve redevelopment demonstrates how innovative development and strength-based partnerships can make a difference in the community. The CDA created a tax increment financing (TIF) district to recover the costs of redevelopment through the increased property values and subsequent taxes.