Funding affordable housing projects is often a challenge for developers. Money is not always available available, even once a project has been approved and funding secured. Delays in funding access can lead to building delays, as well. In an attempt to increase available funding, Housing Municipalities across the country are making changes to development policies that govern the distribution of fees.
Late last year, the Indiana Housing & Community Development Authority announced a change to its policy regarding developer fees. The policy applies specifically to developers that are using Community Development Block Grant (CDBG) and HOME funding.
Effective immediately, up to 25 percent of funding listed in the “developer fee” line item can be drawn down at the beginning of the project. After that, it can be drawn down in only the same amounts as the “hard cost” line items are drawn down. This means that, on a project with a $ 30,000 developer fee, $ 7,500 is available immediately.
This policy change is not only effective immediately for Indiana housing projects, but retroactively applies to any project that has been awarded IHCDA funding and includes developer fees that have more than 75 percent of developer fees still undrawn. Questions can be directed to the Indiana Housing & Community Development Authority.
Changes like these continue to help developers get their projects up and running in a timely manner, reducing the amount of time people have to wait for much-needed affordable housing. The more quickly these projects are finished, the more quickly communities across the country can get people into affordable housing and off their long waiting lists.