Loan board looking to help affordable-home developers

The Olene Walker Housing Loan Fund board is shoring up Utah's affordable housing market by dipping into the fund's reserves — $2.1 million in earned interest on outstanding loans — to aid affordable-housing developers.

The board salvaged six properties, encompassing 263 new, or newly renovated, low-income housing units.

"We've been careful not to overextend the fund. We wish we could do more," said board chairwoman, Midvale Mayor JoAnn B. Seghini. "Without this funding, Utah would lose more ground. Utah already faces a projected shortage of 63,000 affordable rental units."

The credit crunch has put a clamp on financing for affordable housing, just as the number of foreclosures is rising and stricter lending standards are pricing many out of the market for new homes, said Gordon D. Walker, director of the Utah Division of Housing and Community Development.

"Much of the affordable housing in this country is funded through the sale of tax credits, and the biggest buyers of credits are financial institutions, which are still recovering from the mortgage crisis," Walker said. "Slumping demand for the tax credits has driven the price down, and developers are looking to the Olene Walker Housing Loan Fund to plug the gaps."

Demand for affordable housing depleted the fund this winter and will be replenished in July. The board has a scheduled meeting that month but voted last week to withhold any new funding until its October meeting to coincide with the Utah Housing Corporation's biannual award of tax credits.

"Through better coordination, we hope to guard against construction delays, which can lead to crippling cost overruns," said Seghini. "We're doing what we can to help our low-income families weather this crisis."

The Olene Walker Housing Loan Fund was started in 1987 to create and preserve safe and affordable housing for low-income Utahns. The fund provides "bridge funding," in the form of grants and loans, to developers statewide who then leverage the money to obtain federal and private equity and tax credits. The fund is managed by the state Division of Housing and Community Development under the Department of Community and Culture.

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E-mail: jthalman@desnews.com