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Budget Year / Version:  
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Description

This project provides funding to address the urgent challenge of preservation and development of affordable housing in areas at risk of rent escalation to higher market rents, including the Purple Line Corridor and other County transit corridors. The funds will be used to provide seed money to establish a public-private preservation commitment of funds which will proactively leverage public and private capital to support affordable housing developers in preserving and producing targeted affordable housing. The County commitment of funds will allow establishing parameters of a contractual agreement with a fund manager, such as a Community Development Financial Institution (CDFI), which would coordinate commitment of private capital to align with the County's funds and support acquisitions of properties to create long-term affordability. The County's project funds would be dedicated as available to acquisition transactions in combination with the private capital under predetermined terms, with County lending based on approval of each transaction. The approved funds are expected to support financing activity within six months of allocation, based on time needed to identify partners, develop investment guidelines, and document responsibilities. The funds will be used to assist affordable housing developers purchasing properties offered for sale, and potentially to purchase property from the County which it acquires under the Right of First Refusal law. A portion of the units in these properties must serve households with incomes that are at or below incomes eligible for the Moderately Priced Dwelling Unit (MPDU) program. Loan terms will primarily be short term (up to 36 months) in duration. Funds are expected to revolve based on refinancing or redevelopment financing.
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Phase

Planning Stage

Status

Active
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Budget Snapshot
$40M Total
Expenditures/Funding
$20M 6 Year Total
Expenditures/Funding
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Cost Change

Cost increase due to the addition of anticipated loan repayment proceeds in FY26 and FY27.
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Justification

The County has a severe shortage of affordable housing and needs to maximize and leverage private investment in the preservation and creation of dedicated affordable housing. The fund structure will establish predetermined underwriting parameters and qualifications for rapidly purchasing targeted properties. The fund structure will allow time for implementing a range of longer-term actions addressing specific property opportunities from rental agreements to redevelopment. The expectation is that these funds will leverage approximately $4 for every $1 of County funding. Opportunities to purchase property utilizing the County's Right of First Refusal could arise without advance notice and would not be planned in advance. Other targeted acquisitions would benefit from access to a dedicated source of ready funding. Properties may be acquired by the County, the Housing Opportunities Commission, non-profit developers or other entities that agree to maintain affordability, or develop/redevelop a property for affordable housing.
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Other

Resale or control period restrictions to ensure long-term affordability should be a part of projects funded with these monies.
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Fiscal Note

FY21 approved supplemental for $8,000,000. Future loan repayments are expected and will be used to finance future housing activities in this project.
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Coordination

Montgomery County Revenue Authority, Housing Opportunities Commission, non-profit housing providers, private sector developers, and financing institutions.
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Budget Snapshot
$40M Total
Expenditures/Funding
$20M 6 Year Total
Expenditures/Funding
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Project Details
Project NumberP762101
Date Last Modified01/07/24
Administering AgencyHousing & Community Affairs
CategoryCommunity Development and Housing
SubCategoryHousing (MCG)
Planning AreaCountywide
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Total Expenditures by Cost Element (000s)
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Total Funding by Source (000s)
EXPENDITURES (000s)
Cost ElementsTotalThru FY23Est FY24Total 6 YearsFY 25FY 26FY 27FY 28FY 29FY 30Beyond 6 Years
Planning, Design and Supervision00000000000
Land400009456105442000005000150000000
Site Improvements and Utilities00000000000
Construction00000000000
Other00000000000
Total Expenditures400009456105442000005000150000000
FUNDING (000s)
Funding SourceTotalThru FY23Est FY24Total 6 YearsFY 25FY 26FY 27FY 28FY 29FY 30Beyond 6 Years
Current Revenue: General29160291600000000
Loan Repayment Proceeds20000002000005000150000000
Recordation Tax Premium (MCG)170849456762800000000
Total Funding Sources400009456105442000005000150000000
APPROPRIATION AND EXPENDITURE DATA ($000s)
Appropriation FY 25 Request0
Year First AppropriationFY21
Appropriation FY 26 Request5000
Last FY's Cost Estimate20000
Cumulative Appropriation20000
Expenditure / Encumbrances9456
Unencumbered Balance10544