US Treasury authorizes COVID funds for local and state affordable housing loans

WASHINGTON, July 27 (Reuters) – The U.S. Treasury said on Wednesday it would give state, local and tribal governments greater flexibility to use COVID-19 rescue funds to boost the supply of affordable housing, including authorization to issue direct long-term projects. loans.

Changes to the $350 billion State and Local Tax Relief Fund program aim to fill a funding gap for affordable housing projects, allowing them to be developed more easily, especially those that are eligible for the Treasury low-income housing tax credit.

State, local and tribal governments can fully provide loan principal under the new guidelines, provided the projects meet certain criteria.

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The Treasury also said it was expanding the range of uses of the funds for projects beyond those currently allowed under two major Department of Housing and Urban Development programs to additional federal programs from several agencies.

U.S. Assistant Treasury Secretary Wally Adeyemo said the Treasury clarifies that state and local funds can be used to fund the development, repair and operation of any affordable rental housing with 20-year long-term affordability. or older to households aged 65 or younger. % of local area median income level.

The Treasury had previously called on states and municipalities to use more of their COVID-19 allocations to address a severe shortage of affordable housing, a driver of inflation. Read more .

But Adeyemo said state and local housing agencies have asked for more flexibility and a wider use of funds.

“What I’ve seen more and more is that there are now a number of affordable housing projects that started during the pandemic that have become more expensive, and there’s a need for additional funding,” Adeyemo told reporters. “And it’s hard to find.”

Through March 31, more than 600 communities had budgeted $12.9 billion of their state and local funding allocations to address housing needs and reduce housing costs, including $4.2 billion for development and preservation of affordable housing.

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Reporting by David Lawder; edited by Richard Pullin

Our standards: The Thomson Reuters Trust Principles.

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