Affordable Housing Trust Fund

Across Illinois, quality affordable housing has become increasingly scarce and desperately needed for many low- and very low-income households. Demand for affordable rental units continues to exceed supply, and quality housing too often costs more than families can afford.

In September of 1989, the Illinois Legislature created the Illinois Affordable Housing Trust Fund, an initiative to help create and fund affordable housing programs across the state. Through the Affordable Housing Trust Fund, approximately $16 million to $20 million is allocated each year to eligible sponsors and developers for the benefit of low- and very low-income Illinois households. Low-income is defined as 80 percent of the area median income. Very low-income is defined as 50 percent of the area median income.

Funding Facts

Funding of the Illinois Affordable Housing Trust Fund comes from a single source. Each month, the state forwards 50 percent of the real estate transfer fee to the Illinois Housing Development Authority (IHDA) for adminis­tration of the program statewide. Trust Funds are made available, on a competitive basis, to both non-profit and for-profit entities and units of local government. Individual citizens are not eligible for Trust Fund financing.

The Illinois Housing Development Authority periodically reviews all eligible applicants and makes funding decisions based upon specific criteria, such as a project’s readiness to proceed, its percentage of affordable housing units and the development’s impact on the community. Other criteria used to evaluate housing applications include a development’s willingness to house special needs popula­tions and its commitment to mixed-income developments. All project applications are initially reviewed by the Affordable Housing Trust Fund Advisory Commission before final approval by the IHDA Board of Directors at its monthly meeting. Advisory Commission and IHDA Board meetings are open to the public.

While Trust Funds may be distributed in the form of a loan or a grant, the maximum fund­ing typically awarded is $750,000 per project. In addition, a project sponsor is generally awarded no more than $1.5 million in Trust Fund financing within a 12-month period. Trust Funds are generally considered a “last resort” financing source, meaning they are used in instances where there is no other financing available to make a project viable.

Trust Fund Financing at Work

While Trust Funds are primarily used for the rehabilitation of existing single-family and multifamily housing, specific examples of projects funded through the Affordable Housing Trust Fund may vary in size and scope and are located across the state. Following is a short description of the types of projects typically~ funded through Trust Fund dollars.

• For Sale (As Is/New Construction/Rehabili­tation) Programs allow sponsor agencies to help fix up or construct homes for purchase by individual low- and very low-income households.
• Down Payment/Closing Cost Programs allow sponsor agencies to help low- and very low-income homebuyers receive help with down payments and closing costs.
• Owner-Occupied Rehab Programs allow sponsor agencies to create programs for low-and very low-income households to bring their homes up to required building codes.
• Multifamily Construction/Rehabilitation Projects allow sponsor agencies to create new developments and rehabilitate existing units to serve low- and very low-income renters across Illinois. Many of these developments may be part of a larger neighborhood revital­ization project, meet the needs of a special population or encourage mixed-income ten­ants within a development.