Real estate investors play a key role in meeting housing demand in the United States. To help meet the U.S. government’s housing goals, federal grants are provided to eligible developers, including real estate investors, that intend to provide affordable housing. Each grant program has specific functions and purposes with distinct eligibility requirements. A useful resource is the Grants.gov website, which provides up-to-date information on available grants.
Economic Development Grant Programs
The U.S. Department of Commerce’s Economic Development Administration has grant programs aimed at promoting economic growth in lower income communities. The grants are provided so that a real estate investor can create job opportunities in construction for qualified applicants in economically distressed areas. Eligible investors are required to match the grants provided by the EDA. In addition, the EDA will contribute other resources such as technical assistance to ensure the investment effectively helps the communities.
HOME Investment Partnerships Program
HOME is a federal block grant given to state and local governments to assist in the creation of affordable housing for low-income households. The funds are then distributed to qualified organizations by local governments. Real estate investors can partner with these organizations to request grants under the program. The grant should specifically be used to build, buy and/or rehabilitate housing meant for low-income groups, either for rent or home ownership. The annual grant allocation is about $2 billion.
Emergency Capital Repair Grant
The Emergency Capital Repair Grant is provided by the U.S. Department of Housing and Urban Development to family housing property owners so they can carry out emergency repairs. Funds are aimed at tackling anything that can affect the safety and health of tenants. Examples of repairs allowed under the program include structural components in critical condition and replacement of mechanical equipment. Individual investors can apply to the HUD for the funds up to the maximum grant amount of $500,000. As a requirement for compliance, your housing project should serve a useful purpose for the community or the neighborhood where the property is located.
Assisted Housing Stability and Energy and Green Retrofit Investments Program
The Assisted Housing Stability and Energy and Green Retrofit Program awards about $2 billion for project-based rental assistance and $250 million for energy retrofit and green investments in assisted housing. The funds are provided by the HUD. As a real estate investor applying for grant assistance to be used on energy retrofits for your property, be prepared to show how your housing assists low income families. The HUD determines the amount one qualifies for and the grant money must be spent over a two-year period. You must commit to maintaining rents within affordable margins.
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