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Indiana Finance Authority requests water, housing infrastructure funds amid questions on affordable‑housing requirements
Summary
The Indiana Finance Authority asked the Budget Committee to release $20M for water infrastructure loans and $25M for residential housing infrastructure, describing loan recipients, rates (about 2.6%–3%) and program rules; lawmakers pressed whether developer savings are passed to tenants and how 'affordable housing' is defined locally.
The State Budget Committee reviewed two Indiana Finance Authority programs on Aug. 22 that would provide low‑interest loans to support water and residential housing infrastructure.
Sherri Seiwert and Jim McGoff of the IFA described the Water Infrastructure Assistance Program ($20 million requested) and the Residential Housing Infrastructure Assistance Program ($25 million requested) and said the programs provide low‑interest loans and grants to utilities and communities. Seiwert said 70% of recent loans went to rural communities and 30% to urban communities and that loan interest is set by the SRF interest‑rate matrix, with rates running about 2.6% to 3%.
Seiwert listed municipalities that received loans, including Fort Wayne, Goshen, Auburn, Gas City (two loans), Jamestown, Vincennes, Indianapolis, Clark School (two loans) and Michigan City. Senator Chris Garten and Senator Fady Qaddoura raised questions about whether the savings to developers from program incentives are passed to tenants and whether communities must set a percentage of affordable housing to qualify. Seiwert said the application requires communities to detail housing needs and that IFA provides resources to help local officials understand repayment obligations.
Representative Ed DeLaney asked whether the IFA loans are backed by sources such as tax increment financing or user fees; Seiwert confirmed TIFs and user fees can be sources of repayment and that the loan savings are primarily the interest‑rate spread.
Why it matters: The two programs would fund infrastructure that enables housing and utility improvements. Lawmakers pressed for clarity on definitions and local agreements to ensure public benefits are realized when private development receives public financing.
The committee adopted the agenda that includes both IFA items; no final release of funds was recorded at this meeting.
