Dwellings

Episode 33: Closing the Gap in Affordable Housing Financing

Episode Summary

We talk with Banu San to learn how the new gap financing regulations and underwriting Guidelines change the game for affordable housing developments in San José. Banu discusses how developers can secure the construction funding they need for affordable housing. The improvements to the regulations and guidelines will streamline the funding process, accelerate project timelines, and prioritize projects that are ready for construction. This aligns with the Housing Departments goal of increasing the supply of housing in San José.

Episode Notes

• Affordable Housing - The U.S. Department of Housing and Urban Development defines “affordable housing” as housing on which the occupant pays no more than 30 percent of gross income for housing costs, including utilities.
• Gap Financing – is the last funding required to cover a shortfall in capital needed to develop otherwise shovel-ready affordable housing projects. The City of San José’s Housing Department functions as a gap financer and shall be the last funder needed in an affordable housing deal. Learn more on our Gap Financing Program Regulation Page.
• RFP – Request for Proposals(RFP) is a document that announces a project and invites qualified vendors to submit proposals outlining how they would fulfill the project's requirements. Essentially, it's a formal way for an organization to solicit bids and select the best vendor for a specific project or service. Learn more on our Rolling RFP/NOFA page.
• CDLAC - The California Debt Limit Allocation Committee (CDLAC) was created to set and allocate California’s annual debt ceiling and administer the State’s tax-exempt bond program to allocate the debt authority. CDLAC’s programs are used to finance affordable housing developments for low-income Californians, build solid waste disposal and waste recycling facilities, and to finance industrial development projects. Learn more on their website.
• AMI - is the Area Median Income(AMI) for a specific geographic area, meaning half the households in that area earn more, and half earn less. It's a crucial benchmark for determining eligibility for various housing programs and subsidies. Calculate your AMI on the Housing Choices website.