In the closing days of the Washington State Legislature’s 2023 Session, lawmakers pledged $400-million to the Housing Trust Fund. This represents about a 40% increase over the last budget, even doubles the money provided for the account in some recent years. Lawmakers touted this as the largest individual pot of state money that is available to help get more people into affordable homes.
You may be asking, “where does this money go?”
Essentially, the money is the primary source of funding in Washington for low-income housing projects, such as multi-family rentals. But a portion of the fund, about 10% goes towards helping first-time home buyers come up with their down payment. Of which, buyers access these funds through the Washington State Housing Finance Commission. They offer loans for buyers, sch as the “Home Advantage” loans, and downpayment assistance. In this latest budget cycle, about $40-million new dollars will be available.
As for the rest, the Housing Trust Fund is dedicated to making low-cost loans for affordable housing projects, with the Department of Commerce offering grants and loans with interest rates ranging from zero to 3%.
But there are a number of strict guidelines:
- Money from the fund can only go to local governments, local housing authorities, certain organizations providing behavioral health services, nonprofit community or neighborhood-based organizations, tribes, and nonprofit housing assistance organizations.
- It must go to projects where housing is the main focus, such as assisted living facilities, multi-family rental housing or homes for low-income buyers.
- At least 30% of the projects funded every two years must be located in rural areas.
- Projects must benefit households with less than 80% of the area median income, with at least half of projects are dedicated to very low-income people with under 30% of the area median income.
- Projects selected to receive trust fund dollars also rely on funding from other sources, including local and federal programs.
- Projects that receive funding are required to stay in service and affordable for at least 40 years after they’re built.
In 2023, Spokane County will see two new projects, with Family Infant House Acquisition awarded $360,000 to build 20 low-income units, and the Beloved Sunset Apartments with nearly $11 million to build 59 low-income housing units, which include 14 permanent supportive housing units and 45 multifamily rental units.
In Spokane County, the median household income (as set by HUD for housing purposes) is $84,100, with policy makers in Olympia seeing a need for some 70-thousand housing units immediately
The Legislature created the state’s Housing Trust Fund in 1986 as a way to fund more affordable housing projects and to establish a “continuously renewable resource” to assist in meeting basic housing needs. Even the State now recognizes the lack of housing in Washington, with the Department of Commerce projecting a need of 1.1-million new housing units in the next 20-years.
More than $163 million of this year’s Housing Trust Fund dollars are allocated to a pool for competitive grants and loans. Another $100 million is set aside for permanent supportive housing for people with health and behavioral health challenges, and $25 million is for housing people with developmental disabilities.