Fund intended to provide affordable housing across North Dakota
Applications opened Friday for the Housing Incentive Fund, designed to help provide affordable housing in North Dakota.
Sen. Tony Grindberg, R-Fargo and Sen. Rich Wardner, R-Dickinson drafted the bill with a goal of meeting the demand of what is going on in the state, Grindberg said. "I think it's an appropriate role for North Dakota to be looking for creative ways to assist in the development of western North Dakota."
Grindberg said the idea behind the program was to use the private sector instead of government funds.
"Any time you can incent folks to invest their money, and in this case, getting a return on their money as well, that clearly is a program that is a benefit to the state. It advances housing and residents."
The program was signed into law April 26 and is designed to help with housing for multifamily development, North Dakota Housing Finance Agency Executive Director Mike Anderson said from Bismarck on Friday.
"This is a new concept in terms of the state recognizing that they need to help further the development of affordable housing where it is mostly needed," he said. "Anybody that is interested in the future of their community, this is way that they can invest in their community by investing in a local housing project."
Part of the program involves an incentive for donating money to the fund. Individuals, businesses and financial institutes who donate money will receive a tax credit toward their state income.
"It is a mechanism for raising private capital for multifamily housing in North Dakota," Anderson said. "For every contribution made there is a dollar-for-dollar tax credit that the benefactor will receive that they will be able to claim against any tax liability."
Legislation has directed the NDHFA to administer the distributing of funds and $4 million in tax credit is available in 2011 and 2012.
Fifty percent of the funds would go to households at 50 percent or less of the area median income, Anderson said. Twenty-five percent of the funds also must be used to assist communities with less than 10,000 people.
Funds can be used for new construction, rehabilitation of multifamily structures, or re-engineering a building into housing.
"It's targeted primarily toward affordable housing," Anderson said. "It's targeted to areas that are difficult to develop."
Anderson added that an allocation plan consisted of distributing up to 60 percent of the funds to oil-impacted counties and federally disaster declared counties.
Funds would be distributed in the form of loans and would then be repaid and recaptured to use for future projects.
"What we would like to be able to see is these funds would be recycled into new projects," Anderson said.
The Industrial Commission approved the annual allocation plan for the Housing Incentive Fund. Ag Commissioner Doug Goehring of Bismarck is on the commission with Gov. Jack Dalrymple and Attorney General Wayne Stenehjem. Goehring said the plan would be a great way for individuals and businesses to invest in their communities.
"We are all kind of connected at the hip, so to speak," said Ag Commissioner Doug Goehring, Bismarck. "This would take it to the next level. It would give people another opportunity to get active and involved indirectly."
Contributions can be made to the NDHFA by calling 800-292-8621 and asking for HIF. Developers for projects can apply for allocations by calling the same number or going to www.ndhfa.org. Loans will be distributed with terms determined on a case by case basis.
Wardner was unavailable for comment Friday.