Chas Olson, interim director of the South Dakota Housing Development Authority, told his board members yesterday that he’s moving the rulemaking necessary to implement the Legislatively approved but gubernatorially delayed $200-million housing infrastructure program as quickly as possible:
The South Dakota Housing Development Authority is moving forward with proposed rules for spreading the $200 million the Legislature wants spent on affordable housing infrastructure.
The authority’s governing board on Tuesday gave initial approval to the package and set the date for a public hearing.
…“Everybody understands the urgency of this,” Olson told board members [Bob Mercer, “Housing Board Proceeds to $200 Million Rules Hearing,” KELO-TV, 2023.05.02].
In an April 28 memo to the HDA, Olson summarized changes to the proposed rules:
- Only non-profit entities may apply for the grants and loans.
- Projects applying for the $150M of state funds in the program qualify if they began construction after February 1, the date Senate Bill 41 took effect.
- Projects applying for the $50M of federal ARPA funds qualify if they incurred costs as early as March 3, 2021.
- SDHDA will take applications any time rather than the original plan to restrict applications to two cycles per year.
- Grant applicants must provide an analysis of how their projects will reduce home prices and rent.
- The SDHDA exec may approve up to a 5% boost in any applicant’s funding to cover inflation and overruns. Any larger increase will require Board approval.
- SDHDA is extending the allowable mortgage terms from 15-year amortization with a 5-year balloon to 25-year amortization with a 10-year balloon.
- The maximum interest rate is rising from 5% to the IRS’s federal rate (which, if I’m reading the IRS’s May update correctly, is no less than 9%).
- The amount of any award that the SDHDA can withhold until completion of the project is going down to 10% from one third.