A new $20 million fund has been created to provide grants for affordable apartment developments throughout Wisconsin, state officials have announced.
The grants will be provided to apartment developments which have already received federal or state affordable housing tax credits in 2020 and 2021, according to a statement from Gov. Tony Evers and Wisconsin Housing and Economic Development Authority Chief Executive Officer and Executive Director Elmer Moore Jr.
Developers that receive tax credits must generally provide at least 85% of a building’s apartments at below-market rents to people earning no higher than 60% of the local median income.
Developers sell the tax credits, often to banks and other investors, to raise capital for their projects. Most of the additional funds are usually provided through commercial loans.
It’s not unusual for an affordable apartment development to still have a gap in its financing.
Those gaps can be filled with such options as federal grants, deferred fees for the developers and tax incremental financing districts — which use local property tax revenue generated by the new developments.
The new state fund, using federal cash provided by the American Rescue Plan Act, will provide grants to help fill additional gaps.
It is expected to move forward approximately 1,800 affordable rental units throughout Wisconsin, according to state officials.
“Affordable housing links business growth, job creation, and education, and it’s good for our workforce, our kids and families, and our seniors,” Evers said, in a statement.
In a separate action, Evers in February announced that Milwaukee is getting $15 million from the state’s ARPA-financed Neighborhood Investment Fund.
That includes $12.9 million that will be used to help develop more than 400 affordable rental units.