§1437z–7 Mixed-finance Public Housing

Summary

Public housing agencies may own, run, help, or take part in mixed-finance housing projects that use both public housing money and private money. A PHA can use money from the Operating Fund or the Capital Fund (see section 1437g) to help these projects. Capital help can be grants, loans, guarantees, or other investments, and can be paid out along with construction draws or placed in an interest-bearing escrow to back bonds or other loans. Funds for operating and management can also be used to create an operating reserve to keep units affordable for low- and very low-income families. Mixed-finance project — a development that combines public housing funds with private financing (for example, low-income housing tax credits under section 42 of title 26). These projects can be built by a PHA, an affiliate, a partnership or LLC where the PHA plays a key role, an entity that gives the PHA a right of first refusal under section 42(i)(7), or others approved by the Secretary. The PHA must make sure public housing units in the project are available and maintained under public housing rules for the required time. The number of public housing units should roughly match the PHA’s share of money in the project or at least equal what could be built under the regular public housing program. A PHA may choose to have public housing units taxed locally and may follow tax-credit rent limits (but public housing resident rents cannot exceed limits in section 1437a). If Capital Fund use creates savings, the PHA may rent private nearby units for eligible low-income families. If a PHA can’t meet contract duties because of funding cuts, project owners may, under Secretary rules, make limited changes to rents or eligibility to keep units viable while staying as low-income as possible.