Podcast: Finding Financing to Support Building Homes

Logan Finney, Idaho Reports:

Can you tell me generally, what is the job of the Idaho Housing and Finance Association? What sort of work do you guys do?

Jason Lantz, Idaho Housing and Finance Association:

In simplest terms, our mission is to expand housing opportunities and to support and promote economic development throughout the state. So that’s the simple version.

We do that in a number of ways. We’re probably best known for our home loan programs. We work in partnership with lenders and realtors throughout the state to provide home loan products, loans that are a little bit lower market. Elsewhere, we help finance and provide oversight for affordable apartment buildings. We do administer some federal programs for federal rental assistance. We also do some economic development activities that range anywhere from small business financing to financing for large infrastructure projects to charter schools and nonprofit facilities.

IR:

When it comes to housing specifically, how much need do you as an agency see for affordable housing across the state?

Lantz:

Well, I don’t think that it’s a secret. There’s a need throughout the state for all types of housing. I think that those needs and those challenges are different, as different as the different parts of the state. So yeah, there’s definitely an acute need for housing. That’s an important thing.

IR:

Speaking of all the regions being different, are there any particular characteristics in particular parts of the state that compound those issues?

Lantz:

I think each different type of region has its own challenges that are, like I said, that are unique. I mean, the challenges that a resort community like in the Ketchum area would face is completely different from what a more metropolitan area like Boise or the Treasure Valley would face. And then you throw in, you know, there’s an acute need for affordable housing that’s safe for in rural areas. So, it’s unique, but we all face kind of the same similar challenges.

IR:

In those areas all over where there’s a need for affordable housing, what sort of funding and financing and support options do you guys offer at IHFA?

Lantz:

You know, part of our mission is to support those affordable housing options throughout the state, regardless of where you’re at in your housing journey. Whether you’re at risk of homelessness or you’re a homeowner or whatever stage you’re in, that’s our mission. So, we have a wide gamut of different types of programs, whether it’s a home loan program all the way down to rental assistance to housing counseling and support for people that already own a home or people who are looking to buy a home.

IR:

One of the particular programs you guys administer is the Workforce Housing Fund, gap financing that was created with $50 million from the American Rescue Plan Act by the legislature. Can you talk to me about that fund specifically, and what sort of projects it’s been involved with?

Lantz:

The Workforce Housing Fund, the intent of that program is to supplement and enhance some existing funding tools that exist. So, it does that by doing what’s called providing what’s called gap financing for qualified rental developments.

IR:

Okay. Can you kind of explain for me the differences between what we’d call “affordable” versus “workforce” versus “market” housing?

Lantz:

I can. I think affordable housing is kind of a broad term, and it’s relative, you know, it relies on a lot of different factors, whether it’s your income or where you live or who you live with. That’s kind of the affordable housing piece.

I think the workforce housing is a little more specific, a little more accurate. Basically, as the name implies, the intent there is housing for people who are increasingly finding it difficult to find affordable housing that are in the workforce already. And that could be anywhere from nurses to teachers to first responders.

IR:

How much interest has the association seen in this workforce housing fund? How many applications do you get and how many projects have been approved?

Lantz:

Well, we’ve deployed- I can tell you, I don’t know exactly the number of applications that we got, but I know that it was a it was a true collaborative effort between municipalities, developers, other lenders and us. The result of that is about 1,150 new affordable units in the state, new workforce units. Those 1,150 units are spread across 11 different communities, rural and urban, top to bottom, and 17 developments in 11 different communities.

IR:

It’s a pretty good footprint.

Lantz:

Yeah.

IR:

This program is set up, it’s described as a gap financing program. Can you talk to me about that specifically?

Lantz:

Gap financing is a very important piece to a complicated financial puzzle that’s necessary to build these types of homes and these types of housing. We talked about a little earlier, the existing financing programs, the financing tools, whether that’s a federal tool like the low income housing tax credit or whether it’s just community investment, those can’t cover the entire cost of building and operating this type of affordable development.

Lantz:

So the workforce housing fund comes in, it bridges that gap between the cost and the revenue generated by rents that are a little bit lower than market rate.

IR:

So, when the workforce housing fund is being utilized, we’ve said it’s utilized kind of en suite with some of these other tax credits. Can you kind of run me through those one more time?

Lantz:

There’s a complicated stack of funding. You know, there’s private investment, there’s workforce housing fund, there’s community investment. All of those funding mechanisms stack up, and the gap, the workforce housing fund steps in again to fill that gap between what the affordable rents can support and then the cost of building and operating a development for the long term. Did I answer your question?

IR:

Yes, and I’ll ask it a different way. That low income tax credit and these other tools, what are those intended to address if it’s not specifically workforce? Are they meant to address just affordability more broadly? A certain demographic?

Lantz:

I think typically, you know, there’s a multitude of different financing tools out there. Probably the most common and most well known – and to be honest, the most successful – is the low income housing tax credit program. That’s generally aimed at 60% of AMI or less. So, it’s people who are in the workforce, they earn 60% of AMI or less. That’s a simple explanation. But there are other tools like the federal home, it’s called the HOME grant program. There’s the national housing trust fund. There’s investment from Idaho Housing. You know, we kind of put all of those into one – for lack of a better term, we call it the “Build Idaho Fund” – as a way to talk about all of those funding sources.

But depending. They all have their different requirements and different compliance, different rules for each of them. But that’s part of where we fit in, is to make sure that we’re utilizing those in the best way possible and helping other people understand them.

IR:

How complicated does that get, managing all these different programs?

Lantz:

It’s more complicated than I can handle, but we have an excellent, excellent group of people that have spent their entire career doing these types of things that are very good at this. I certainly couldn’t do it. I’m just the comms guy.

IR:

Is there anything else about IHFA that you think our audience should be aware of as they’re living their lives out in Idaho?

Lantz:

I would say just in general, again, it goes back to our mission. You know, we’re here to support housing for all people in Idaho. So, we’re not just the big. That’s part of what we do is the financial side, and we also do the home loans. But we also have things like homebuyer education, housing counseling. So, if you have a question, you can call one of our housing counselors and they can intervene and help you out. We just have a wide range of programs that are meant to support everybody, wherever they are.

IR:

All right. Jason Lantz, marketing and communications director with the Idaho Housing and Finance Association. Thanks for joining us.

Lantz:

Thank you. Happy to be here.