Aligning Policy and Housing Outcomes
Affordable Housing Trust
Create an Affordable Housing Trust Fund
Issues/Opportunities Addressed: C)
Timeframe for Action: Short Term
Affordable Housing Trust (AHT) funds are a flexible
source of funding that can be used to support many
different affordable housing initiatives. The money that is
generated for the fund is typically created and
administered at the city level and are not subject to
restrictions like other state and federal housing funds. The
money in the fund can be designed to address local needs
and priorities, such as those noted throughout this
Housing Study.
The entity administering the fund, in this case the City of
Nashua, would work to define priorities and eligible
activities money in the fund could be used for. Examples
of funding areas might include:
« Emergency rental assistance
¢ Gap financing for new construction of affordable units
¢ Repairs/rehabilitation of older affordable homes/units
¢ Weatherization program to lower utility costs
¢ Down payment and closing assistance
* Foreclosure prevention
Once the AHT is established the City will need to
determine who will be administering the fund. Typically,
these funds are administered by existing public office that
have experience working in partnership with housing
developers, administering grants, and overseeing a
Nashua Housing Study - 64
competitive application process for funding. In Nashua,
this is likely the Community Development Division which
already handles the City's allocations of federal housing
funds through the Urban Programs Department. Placing
the oversight of the AHT within the Community
Development Division would also create synergy with
the City’s Consolidated Plan, Master Plan, development
permitting, and connections with other housing
partners.
The entity responsible for managing the housing trust
fund will need to make a variety of administrative
decisions about the fund’s operation:
1. How will awards be structured—as grants, low-
interest or forgivable loans, credit guarantees, or in
some other form? This decision will be guided in large
part by the activities to be funded.
2. How will the application process be
structured? Should it be on a rolling basis, annual, or
semi-annual? Should submission timelines be
coordinated with other funding programs?
3. How will applications be evaluated? Will priority be
given to any types of projects, or projects with certain
characteristics?
ASSOCIATES INC
4. How will long term monitoring be handled for
affordable units?
Nashua will also need to establish other rules and
guidelines regarding administration of the housing
trust fund, including establishing the agency or
department responsible for day-to-day management
of the fund and expectations for reporting on
housing trust fund activities. Many cities also
establish an advisory body composed of
stakeholders from diverse backgrounds to help guide
trust fund administration and provide program
oversight.
There are many possible funding sources to
capitalize the AHT which could include revenue from
payments in lieu of affordable housing, linkage fees,
real estate transfer taxes, taxes or fees on short-term
rentals, proceeds from the sale of City-owned
property, or even a dedicated revenue source from
an annual budget appropriation. The City should
strongly consider tying Inclusionary Zoning to the
AHT to generate funds from payments in-lieu.
