Affordable Housing Gap Financing

The Affordable Housing Gap Financing program (AHGF) is a $25,000,000 loan fund dedicated to the creation of new rental units and permanent supportive housing. The program will provide subordinate financing for affordable rental housing projects benefitting families at up to 30% of the Area Median Income (AMI) which was $22,770 for a family of 3 in Nashville in 2021. Additionally, the funding will provide units to be set aside for use for Permanent Supportive Housing (PSH) subsidies combined with Housing First Supportive Services and assigned by Coordinated entry In Multifamily Developments throughout the City. AHGF is intended to bring much needed housing units into use for the homeless. This is done by providing gap financing to multi-family mixed housing developments which have already been approved for Low Income Housing Tax Credits and/or other federal subsidies and have completed their financial stack but are experiencing a gap due to increased costs of insurance, materials, and labor. These are projects that are underway, ready to break ground and in some instances are already complete. The program will be administered by MDHA. A portion of funds (5%) will be allocated to MDHA for program administration expenses. This program is funded solely with American Rescue Plan Act funding. The funding was approved by the Metro Nashville Council in fall of 2022 and the first round of applications were due in December 2022.