The Capital Stack of an Affordable Housing Project

[Matt J.]

We all know most markets in the country are suffering from a huge shortage of affordable housing. I would assume there are some people on here who have gone down the path of developing affordable housing projects for their respective markets. 

How does the capital stack look on most of these? Are you mainly partnering with local municipalities and grant programs and then bringing in a lender? Private investment in these projects seems like a challenge as I can't see how they'd get paid back on their principal. 

I'd love to hear how people make these projects work as I want to help provide more affordable housing for the markets in our area in the Twin Cities, Duluth, and the Brainerd Lakes Area. 

[Brittany Kuschel]

@Tim Swierczek makes a great suggestion! I know Sherman Associates have completed a number of affordable housing projects in Duluth (and were recently navigating another under construction in Lincoln Park that ran into some difficulties). They have utilized a number of financing approaches including: Minnesota Housing Finance Agency Tax Credits, Conventional, Grants through Duluth Economic Development Authority (DEDA), Duluth Housing & Redevelopment Authority (HRA) Assistance.

Sharon Brown with Duluth's Life Safety office is a great resource as well when dealing with blighted properties. She has a ton of resources and could be a great person to connect with to discuss your ideas. 

A few other resources that offer funding opportunties for blighted and/or brownfield site renovations are MPCA, Kansas State Technical Assistance to Brownfields, DEED, LISC. You might also connect with Ecolibrium3 and Community Action Duluth to see if they have any upcoming housing projects on which they are looking to source local partners