In late July, the U.S. Treasury Department (Treasury), in partnership with the federal Department of Housing and Urban Development (HUD), released a simple guide to investing State and Local Fiscal Recovery Funds (SLFRF aka ARPA) in affordable housing.

Under the ARPA Final Rule, investing in affordable housing is an eligible use of federal funds. Under the new guidelines released in July, Treasury is expanding which projects may be eligible:

1. Funds may be used to fully finance certain long-term loans that support affordable housing investment. SFLRF funds may be used to fund the full principal amount of the loan, if the loan and project meet certain requirements.
2. Expanding presumptively eligible uses by providing two additional options.
3. SLFRF funds may be used to help fund pre-project development activities, which could include land acquisition and site work, that precede housing development or rehabilitation of affordable housing.
4. SLFRF may be used to convert vacant or abandoned properties to affordable housing in disproportionately impacted communities.
5. Funds may be used to acquire properties that will be transitioned into affordable housing or acquisition and preservation of publicly supported affordable housing.
6. May finance energy efficient retrofits and weatherization.

The eight-page document provides cities with a summary of updated guidance as well as clear options for how they can use ARPA funds to invest in affordable housing.

As of March 31, 2022, over 600 state and local governments budgeted $12.9 billion in APRA funds to meet local housing needs and lower housing-related costs, including $4.2 billion for affordable housing development and preservation. In Washington, several cities have taken on affordable housing projects benefiting their communities. You can read about these projects and more in our Homelessness & Housing Toolkit for Cities.

If your city is investing ARPA funds in affordable housing, please let us know!