Virginia Housing Trust Fund credited with boosting affordable housing production as state invests $87.5 million annually

The Department of Housing and Community Development told the Virginia Housing Commission—s work group on Aug. 19 that the Virginia Housing Trust Fund has been used since 2013 to generate and preserve thousands of affordable housing units across the Commonwealth.

"When we think about affordable ... we think about keeping a household's costs for housing within 30% of their gross income," said Maggie Beal, a DHCD staff member, describing the agency's targeting of households at 80% or below area median income. Beal said the trust fund is usually the "last in dollars" on projects to close financing gaps and push shovel-ready developments into construction.

DHCD officials said the program combines four funding sources and that, since 2013, trust fund investments have "generated or preserved 14,800 housing units" statewide. Beal said the department expects an $87,500,000 annual appropriation for the trust fund that will flow into the agency—s competitive pool; she said 80% of that annual appropriation will go to the competitive loan pool and 20% to homeless and special-needs housing and administration.

Nut graf: The trust fund is intended as gap financing that works alongside federal and other state resources to finish projects that are ready to build; DHCD and advocates said increased annual appropriations have materially increased the number of units the program supports but that demand still outstrips funding.

DHCD described program mechanics and scoring. Projects typically show many funding sources and the trust fund normally provides the final guarantee or loan that lets a development move into construction, Beal said. She said DHCD historically capped awards at $2.5 million for a project and this year increased the cap to $3 million for combined Affordable and Special Needs Housing Fund awards; DHCD staff also said it can provide project-level breakdowns on income targeting on request.

Isabelle McLean, director of policy and advocacy for the Virginia Housing Alliance, said her group's annual impact report tracks funded projects and places them on an interactive statewide map. "We're currently at $87,500,000 a year, which is the greatest that it's been invested in so far," McLean said, and noted the Alliance's count of nearly 20,000 units (a slightly different methodology than DHCD's) and at least 1,800 permanent supportive housing units included in that tally.

Members of the work group questioned DHCD about deployment and outcomes. Committee members asked whether trust fund dollars are used for workforce housing (80% AMI is the program ceiling, DHCD said), how many units target below-60% AMI (DHCD said it could provide that breakdown at a later meeting) and the typical award size per project (DHCD said the effective cap for the combined pool rose to $3 million this year, while noting not all award dollars come solely from the trust fund).

Ending: The work group asked DHCD to return with more data at its October meeting; members and advocates said they see the trust fund as a key, though insufficient, tool to leverage tax credits, federal loans and private investment to increase production and preserve existing affordable stock.