New Changes Make Construction Loans More Appealing to Developers
New changes to the Housing Trust Fund of Oklahoma make it a more attractive financing tool for developers looking to build affordable housing in the state. The biggest change involves removing the limit on the amount of money that can be borrowed, although the amount is still subject to the availability of funds and reasonableness.
Established in 1998 by the state legislature with a one-time general fund contribution of $4.7 million, the Housing Trust Fund serves as a revolving loan fund for low-interest loans to finance new construction of rental or homeownership units; conversion of non-residential structures into rental or homeownership; acquisition and/or rehabilitation; or housing infrastructure when part of a total development project.
Other changes to the program include adjusting the interest rate to two percent, increasing the loan term from 18 to 24 months, changing the period of affordability to three years, and increasing the income limits for residents to 120 percent of average median income.
Recently, a Housing Trust Fund loan of $2.6 million was utilized by Milestone Homes and the City of Guymon to build 24 for sale single-family homes that helped reduce the city’s housing shortage.
“The Oklahoma Housing Trust Fund provides significant cost savings to developers,” said OHFA Executive Director Dennis Shockley. “Changes to the program requirements will make it easier for more housing construction projects like the one in Guymon to occur in other rural parts.”
All Housing Trust Fund loans are non-recourse with simple interest, and borrowers are not required to make payment of principal or interest until the end of the loan.
For-profit developers, non-profit organizations, local governments, Indian tribes and political subdivisions are eligible to apply for Housing Trust Fund loans. For more information on the Housing Trust Fund, visit www.ohfa.org or call (405) 419-8145.
As Oklahoma’s largest provider of affordable housing, OHFA offers nine housing programs ranging from “OHFA Advantage” for home ownership to housing development and rental assistance. For more information about OHFA and its programs and services, visit www.ohfa.org.