The Michigan State Housing Development Authority (MSHDA) has launched a pilot program aimed at streamlining reviews and reducing regulatory barriers on affordable housing developers and owners.
Officials at MSHDA, the Department of Agriculture Rural Development (USDA-RD), and the Department of Housing and Urban (HUD) have approved the first Memorandum of Understanding to align Subsidy Layering Review requirements between the three agencies.
The agencies have been working since April to coordinate the requirements of different affordable rental housing programs to eliminate duplication and streamline services.
Almost all federal housing programs have statutory requirements that call for the administering agencies to confirm that, at the time of making a grant or subsidized loan, the total amount of subsidy being provided by public sources does not exceed eligible costs. When developers of affordable housing are awarded multiple sources of public funding, they become subject to multiple Subsidy Layering Reviews, which cause delays and add costs to projects that are preparing to start construction.
Officials noted that subsidy layering requirements and analysis are handled differently by each agency. For example, the USDA relies on the low-income housing tax credit review and does not require a formal subsidy layering analysis while HUD’s HOME program has detailed guidance on how an analysis must be done.
MSHDA said the new initiative will increase communication between the agencies, provide a one-stop shop for development applicants, implement timelines to ensure expediency of reviews, and simplify the application process.
