State seeking RFPs for $65M in affordable housing funds

The Pennsylvania Housing Finance Agency on Monday issued a Request for Proposals, soliciting applications from organizations for projects to improve the availability and affordability of housing in the state.  

Funding for this RFP is being provided through the Pennsylvania Housing Affordability and Rehabilitation Enhancement (PHARE) Fund. The total PHARE funding available this year exceeds $65 million. 

PHARE receives its funding from the impact fee levied on natural gas drilling companies and a portion of the Realty Transfer Tax. Funding is available for housing initiatives in all of Pennsylvania’s 67 counties.  

“Now in its eleventh year, it’s gratifying to see the many ways this funding has been put to work expanding affordable housing options and preserving existing housing,” said PHFA Executive Director and CEO Robin Wiessmann. “The local organizations that apply for PHARE funding have done a terrific job of targeting the dollars to their most pressing housing needs.” 

Since the PHARE fund began it has funded more than 1,200 housing initiatives in all 67 counties and the funds have been used to leverage more than $1 billion of investments in housing across Pennsylvania.  

The online application is accessible on the PHARE website at https://phare.phfa.org/.  

The website will be open to accept applications starting Monday, Sept. 18.  The deadline for application submission is 2 p.m. on Friday, Nov. 17. 

Lack of affordable housing plagues Pennsylvania, Lehigh Valley

Housing affordability continues to be a problem across the state and the Lehigh Valley is no exception. 

While the affordability of housing isn’t as dire as in some regions like Philadelphia and Allegheny counties, Lehigh and Northampton County both have a challenging landscape for those looking for apartments and single-family homes in the region. 

Bryce Maretzki, director of policy and planning for the Pennsylvania Housing Finance Authority, said recent figures posted by the authority on its website show an alarming number of households paying more than they can afford for housing. 

In Lehigh County, the rent burden is 50.5%, significantly higher than the state average of 44.9%. In Northampton County it’s slightly lower at 49.4%. 

Rent burden refers to the percentage of the population that is paying more than 30% of its income for housing. 

“When people are forced to pay greater and greater amounts for housing they have less for childcare, food and that sort of thing,” Maretzki said. 

In Lehigh County the average rent is $994 per month and in Northampton County the average rent is $997 per month, both are higher than the state average of $885 per month. 

Maretzki said that is affecting low-income households the most. 

“There continues to be a lack of affordable housing units for households earning less than 80% of their area’s median income,” he said. “You may end up having to move further away from employment or school, which is a further burden.” 

It is also affecting home ownership rates. 

In Lehigh County only 65.3 percent of households own their own home compared to the statewide average of 69%. Northampton County residents are faring a little bit better than the rest of the state with an average homeownership rate of 71.6%. 

And the percentage of households that own a home is dropping while the population in the Lehigh Valley is increasing.  

Between the 2010 and 2020 Census, the Lehigh Valley saw a 6.8% increase in population – or about 25,000 new people, putting pressure on the housing supply. 

“The overarching message is that we continue to need affordable housing,” Maretzki said. 

He said there is a great cost to entry for home ownership for lower income people entering the housing market. 

“First they have to be able to afford rent, then they have to save up for a down payment,” he said. 

To help with the affordability of entering the housing market, where prices are at record highs, while home values are dropping, the PHFA is trying to assist first-time home buyers with programs that offer down payment and closing cost assistance. 

It is also addressing the affordable housing stock by promoting tax credits for low-income housing development, so that there will be more affordable “starter” homes on the market. 

In the past 10 years he said the authority has invested $240 million in the program, which is estimated to have leveraged around $5 billion in new housing projects. 

But the picture isn’t entirely bleak, he said. He said Pennsylvania as a whole still has a relatively affordable housing market, especially in more rural areas. 

In Berks County, for example, the average rent is only $720 per month and the rent burden is below the state average at 37.4%. 

Maretzki said encouraging home ownership is important. 

“That’s what helps create wealth and intergenerational wealth. You now have an asset,” he said. 

And the PHFA will continue to work on making affordable housing available to Pennsylvanians.  


State accepting bids for $4.5M in mixed-use development tax credits

The Pennsylvania Housing Finance Agency announced Monday that it is accepting bids for the purchase of $4.5 million in mixed-use development tax credits.  

The funds collected from successful bidders will be used for the construction or rehabilitation of mixed-use developments in Pennsylvania communities. 

The deadline for bids is 2 p.m. on Friday, July 14. 

These tax credits will be used by the winning bidders to reduce their state tax liability. The bidders can be companies, organizations, or individuals.  

The intent of the bidding process is to raise as much funding as possible from the $4.5 million in tax credits being made available to provide for a significant investment in community revitalization projects in various communities.  

The projects to receive this funding will be selected during a competitive Request for Proposals process later this year. 

This tax credit program was created as part of the state’s fiscal year 2016-2017 budget and PHFA was directed to administer the credit. PHFA was authorized to sell these tax credits through directed or negotiated sale to any qualified taxpayer. It is expected that the tax credit awards will be made within 90 days after bidding closes.  

The credit awards will be made in 2023, but they are not effective for utilization until 2024 against a 2023 tax liability. 

“Mixed-use developments bring the benefit of both commercial activity and affordable housing to a community,” said PHFA Executive Director and CEO Robin Wiessmann. “We’re grateful to those who bid on these tax credits because the funding they provide makes the construction or rehabilitation of these new mixed-use developments possible.” 

More information about the mixed-use development tax credit and the current bidding process is available on the PHFA website at: www.phfa.org/mhp/developers/loans.aspx 

Applications for affordable housing available for key funding program

A $100 million program meant to construct and rehabilitate affordable housing units is now accepting applications. 

Senate Democratic Appropriations Chairman Vincent Hughes (D-Montgomery/Philadelphia) announced Tuesday that the Housing Options Grant Program-Multi-family (HOP-MF) Program is now accepting applications. 

Established as part of the 2022-23 Pennsylvania State Budget, the $100 million program is funded by the American Rescue Plan Act (ARPA) and will be used to construct and rehabilitate affordable housing units. The HOP-MF Program is operated by the Pennsylvania Housing Finance Agency (PHFA). 

The applications follow the historic 22-23 state budget investment in affordable and workforce housing. 

“My Democratic colleagues and I were able to work across party lines to deliver major investments in housing in the last budget,” Hughes said in a statement. “We are thankful for the leadership from our former governor, Tom Wolf, President Biden, and our leaders in Congress who helped make this possible.” 

Hughes added that investing in affordable housing is a crucial way to restore and rebuild Pennsylvania’s neighborhoods and brighten the future of the state’s communities. 

“All families deserve a safe and healthy place to call home,” said Hughes. “Eligible parties should apply now!” 

The HOP-MF program is made up of three subprograms – the Emergency Grant Initiative, Preservation Initiative, and New Construction Initiative. 

The Emergency Grant Initiative is designed to provide funding for emergency repairs to existing deed-restricted affordable housing throughout the state so existing tenants are not displaced. 

The aim of the Preservation Initiative is to provide funding to rehabilitate properties on a non-emergency basis with the goal of creating/extending the affordability period and making certain sufficient repairs to the property to ensure the stability of the building through the affordability period. 

The New Construction Initiative/Construction Conversion Initiative is designed to provide financing for the construction of affordable rental properties. 

HOP-MF applications are open through 4 p.m. EST on May 23. The application is available online at Housing Options Grant Program-Multi-family Application – HOPMF (hopmfphfa.org). 

Grants will be awarded no later than Dec. 31, 2024, and the entire funding must be spent by Dec. 31, 2026.

State mixed-use development tax credits up for bid

The Pennsylvania Housing Finance Agency is now accepting bids for $3 million in mixed-use development credits.

Companies, organizations or individuals can use the tax credits to reduce their state tax liability.

The funds collected from bidders will be used for the construction or rehabilitation of mixed-use developments in the state.

By putting the credits out to bid the agency hopes to raise as much funding as possible to provide investment in community revitalization projects, which will be selected during a competitive Request for Proposal process.

“We have had good success over the past few years with the mixed-use developments we’ve funded,” said PHFA Executive Director and CEO Robin Wiessmann. “The retail and commercial portion of each project brings economic activity to the community where it’s located, and of course the affordable housing provided is always in great demand. Mixed-use projects bring a positive energy that is always appreciated in their communities.”

The program was created as part of Pennsylvania’s fiscal year 2016/2017 budget. PHFA was authorized to sell these tax credits through directed or negotiated sale to any qualified taxpayer. It is expected that the tax credit awards will be made within 90 days after bidding closes on July 16.

The credit awards will be made in 2021, but they are not effective for utilization until 2022 against a 2021 tax liability.

Pennsylvania to get $24 million for low-income housing construction financing

Affordable housing development projects in the state that have been hampered by higher construction material costs should get the boost they need with extra funding from the National Housing Trust Fund.

The Pennsylvania Housing Finance Agency said it will receive $24.1 million from the fund this year, a 148% increase over the $9.7 million it received in 2020.

PHFA Executive Director and CEO Robin Wiessmann said this is the largest overall disbursement the fund has ever made. It gave out nearly $700 million this year. The 2020 HTF total funding amount, by comparison, was $322.5 million.

She noted that Pennsylvania had the fourth highest percentage increase among the 50 states that received funds.

Wiessmann said the spike in residential construction costs has prevented many Low Income Housing Tax Credit projects from closing on the financing needed for them to proceed.

To address that issue, the agency has decided to allocate funding from 2021 HTF monies to financially assist some LIHTC projects that have previously received tax credits so they can move forward.

“We’re all aware of how construction costs have jumped during the past year. Recognizing this, we will provide additional financial support to our tax credit projects which, in year 2020 alone, will provide nearly 1,800 additional units of needed rental housing,” she said.

Weismann said the additional funding was extremely welcome by her agency as the pandemic has demonstrated the urgent demand for more affordable rental housing.

PHFA fund to help women and minorities build affordable housing

The Pennsylvania Housing Finance Agency wants to get more women- and minority-owned businesses involved in building affordable housing and it’s creating a fund to help such businesses get started.

The Agency has created a Developer Opportunity Fund for Women-Owned Business Enterprises, Minority-owned Business Enterprises and community developers who are building affordable housing within Pennsylvania through the Low Income Housing Tax Credit Program.

“We have an opportunity to enhance our Low Income Housing Tax Credit program by encouraging the growth of smaller and newer developers who lack the experience and resources to be able to compete effectively,” said PHFA Executive Director and CEO Robin Wiessmann. “These firms are at a disadvantage because of limited experience and a lack of liquidity that hinders their growth. The Developer Opportunity Fund is aimed at helping these firms better compete to add more diversity and broader community representation in the construction of affordable rental housing.”

Weissmann said the need for such a fund became apparent after observing developers applying for tax credit allocations over the past few years.

She said they found that many small developers didn’t have the liquidity or net worth to meet the demands for tax credit investors and were forced to partner with larger developers or other third-party guarantors to meet the liquidity required.

These developers then ask these businesses to give up a substantial amount of their developer fee, making it harder for them to develop independently.

Weissmann said women-owned, minority-owned, and community developers bring unique and important perspectives that can benefit the design and construction of multifamily housing developments and help them better serve female and minority residents and communities of color and should be encouraged to bring their diversity to affordable housing development projects.

The agency PHFA’s hopes to have an initial funding level of $50 million for the fund, with the expectation that this would fund approximately ten projects during the first five years of the pilot. PHFA said it is planning to provide more funding for the program in the future and it is seeking other sources of financial support.

Housing Finance Agency picks ‘inaugural fellow’ for research project

The Pennsylvania Housing Finance Agency (PHFA) named a Penn State graduate student as its inaugural housing policy fellow.

Rachel Fawcett (Photo: Submitted)

Rachel Fawcett will receive a financial stipend of up to $12,000 during 2020 from the Harrisburg-based nonprofit to conduct research into the affordable housing industry. She has a degree in architecture from Penn State and is currently pursuing a master’s degree in professional studies, focusing on community and economic development.

“Rachel was chosen from a group of highly qualified applicants,” said Brian A. Hudson Sr., PHFA’s executive director and CEO. “She has an excellent background preparing her to undertake this research. It’s our hope that her studies as our fellow will provide important insights to help better inform our housing initiatives and will give her experience to advance her own leadership development – a true win-win.”

Fawcett’s fellowship project will focus on research into community land trusts across the country to determine their viability as a housing model to use in Pennsylvania. Community land trusts have been developed to help meet the demand for affordable housing.

The stipend provided through PHFA’s Policy Fellowship can be used for various activities supporting Fawcett’s research, including interviews with experts, securing resources and study materials and travel expenses to related conferences. At the end of the fellowship, Fawcett’s findings will be published by PHFA and made available to policymakers in the housing industry.

Fawcett currently serve as the budgets and publications coordinator at the Pennsylvania Housing Research Center at Penn State. Previously, she was the executive director of the Centre County Housing & Land Trust.

This is the first year of PHFA’s housing policy fellowship with the expectation that another fellow will be chosen in 2021 to conduct additional housing research.

The PHFA works to provide affordable home ownership and rental housing options for older adults, low- and moderate-income families, and people with special housing needs. The agency is governed by a 14-member board.