2025 Affordable Housing Development Gap Subsidy Grant Program
THDA will be presenting the Affordable Housing Development Gap Subsidy Grant Program Workshop Tuesday, April 30th, from 10:00 a.m.– 12:00p.m. CT. Access information to join via TEAMS has been included below.
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2025 Affordable Housing Development Gap Subsidy Grant Program Description
Program Purpose
THDA administers the Tennessee Housing Trust Fund (THTF) to promote the production, preservation, and rehabilitation of housing for low to moderate income households across Tennessee. The Affordable Housing Development Gap Subsidy Program (“Program”) will be funded with a total of $3,000,000 from the THTF. The Program addresses the financial challenge that arises when the cost of developing new homes exceeds their appraised value, a common barrier in economically distressed communities. By bridging this development gap, the Program aims to promote homeownership, stabilize neighborhoods, and gradually improve property appraisal values.
Who Can Apply?
The Development Gap Subsidy Grant Program is available to qualifying non-profit developer organizations that plan to build in specific hard to develop areas of the state where there is a documented gap in the cost to develop affordable housing and the appraised value of new construction housing in those areas. Qualification will be based on the non-profit developers plans for new construction of affordable housing to low and moderate income (up to 120% of the AMI for the area where the home will be developed) homebuyers in hard to develop areas, and the demonstrated need for Development Gap Subsidy in specific targeted areas of the state.
What Type of Funds are Available?
Approved non-profit developers will be issued a Reservation of Funds Letter (Reservation) for up to $700,000. Once a Non-Profit Developer, and the targeted development area have been approved, funds will be provided on a house-by-house basis at a maximum subsidy of $70,000 (Seventy Thousand) per house for development of no more than 10 (Ten) units of single-family housing. In addition, THDA will provide funding equal to 3 (Three) to 6 (Six) percent of the final sales price to fund a seller credit to the purchase to reduce the final liability of the low-moderate income homebuyer to the appraised value of the home, less all other fees and closing costs.
Funding will be provided based to an organization meeting all qualification requirements and submission of a qualified proposal. Successful applicants will be notified on a rolling basis in the order proposals are received and qualified. For successful proposals a Reservation of Funds with a 24-month term, commencing no earlier than June 1, 2025 and ending no later than July 30, 2028 will be issued to the proposing organization(s). THDA will stop accepting applications when all funding has been committed.
How To Apply?
THDA will begin accepting applications for RFPs from Non-Profit Developers for the 2025 Development Subsidy Gap Program on May 1, 2025. Non-Profit Developer applicants must submit their applications electronically through THDA’s PIMS and EFT systems to include required organizational information and a proposal for development of housing in specific hard to build areas of the state.