Waukesha redevelopment loan funds replenished; development fund holds about $1.5 million uncommitted

Redevelopment Authority staff reported that recent repayments and a one-year extension on a prior loan have materially replenished several of the authority’s affordable housing accounts, leaving the affordable housing development fund with roughly $1.5 million in uncommitted funds.

The update was presented at a Redevelopment Authority meeting where staff described balances across multiple program accounts and noted recent inflows. "With that one year, we brought in $937,000," the presenter said, adding that under the authority's policy 75% of that amount goes to the affordable housing development fund and 25% — "per state statute" — goes to the affordable housing rehabilitation program.

Why it matters: the development fund is used for gap financing and construction assistance to create or preserve housing units; having a higher uncommitted balance increases the authority’s ability to support larger projects that seek short-term gap loans or construction financing.

In the authority’s accounting slides, the rental rehab program balance was reported at about $337,000. The affordable housing rehabilitation program — the fund used for single-family/owner-occupied repairs — was reported at roughly $247,000 after the recent inflow. Staff said the storefront activation program (funded with ARPA dollars) had its funds committed by the end of last year, and repayments from outstanding loans are steadily returning principal and interest to program accounts.

Staff described typical loan terms and repayment activity. Multifamily repayments from a 66-unit project bring in about $64,000 per year in principal and interest, and construction loans to nonprofit housing developers typically carry a 3% annual interest rate. Staff also said the authority no longer issues deferred loans in the rental rehab program (a policy change adopted last year) and that interest on older deferred balances had been accruing at about 3%.

Staff and members discussed leveraging other programs to increase the practical subsidy available for affordable projects. The presenter cited several programs that can be combined with the authority’s gap financing, including a local program referred to in the discussion as WIDA, vacancy-to-vitality and an upper-floor storefront-to-housing program; staff said program rules are evolving and a bill in the state legislature might yet change stacking rules for TIF and other incentives.

Staff said the authority monitors tax incremental finance (TIF) districts as they approach closing dates and evaluates whether to capture increment for housing programs or to extend a district. A large district approaching closure could provide a substantial future infusion, staff said, referencing an earlier example when closing a district yielded about $1.9 million for programs.

Meeting context: members asked several clarifying questions about timing of loan closings and how quickly repayments might return to the fund (staff gave spring and summer estimates for several closings). Staff noted regular monthly repayments and that the authority aims to maintain a high uncommitted balance to be ready for larger proposals.

The authority did not take an additional formal action on the program-update item beyond receiving the report.