Finding Affordable Housing Financing Resources in the Puget Sound Region

Nearly a third of the nation’s households are financially burdened when it comes to owning or renting a suitable home. According to the National Association of Home Builders (NAHB), more than 30 percent of their income goes toward housing.

The association cites the following factors—labor and materials prices, interest rates and financing costs, federal, state and local regulations and supply and demand—as parts of the overall housing cost equation.

Further analysis by NAHB shows that regulatory requirements make it difficult to increase the supply of affordable housing.

In the Puget Sound region, and even statewide, affordable housing is a focused concern. In markets with high job growth like the greater Puget Sound area, financing for affordable housing developments (for moderate incomes and previously homeless individuals) can take three to five years for developers.

The Puget Sound area boasts a sophisticated list of nonprofit developers with expertise in affordable housing. But there’s no single source of financing to make affordable housing work. It takes a specialized expertise to structure affordable housing transactions and to navigate through the complex form of financing to realize a construction project.

Heritage Bank offers one-stop financing for nonprofit developers. From construction and permanent financing, to the purchasing of federal low-income housing tax credits, to making the housing transaction balance out and offer less debt and more equity. The process requires a dedicated team of experts. While most larger banks have a centralized approach to real estate and construction loans, Heritage Bank credit decisions are made in the local market.

We believe it’s not always about new affordable housing, it’s also about community development. Heritage Bank was the construction lender and the tax credit investor for the recently completed Liberty Bank Building affordable housing re-development for the displaced African-American community in the Central District of Seattle. The re-developed Liberty Bank Building offers access to below-market rent rates—$800 to $1,100 compared to $2,200—due in part to tax credits.

Heritage Bank offers the Affordable Housing Grant Program through its membership in the Federal Home Loan Bank of Des Moines. Two grants totaling $1.25 million were awarded through Heritage Bank to support Plymouth Housing at the 501 Rainier Supportive Housing and the nonprofit Panza’s Orting Veterans Village developments.

It is important for vibrant communities to have affordable housing for all income levels, and a bank that can structure affordable housing transactions quickly and locally.