According to Shift Research Lab, 50% of Colorado renter households are cost burdened, meaning more than 30% of their annual household income is spent on housing. Despite tireless efforts from the nonprofit community, local municipalities and affordable housing advocates alike, Colorado’s affordable housing crisis is growing. Each year, solutions and policy measures to increase the supply of affordable housing are proposed, but even if all were implemented only a fraction of the need would be addressed. As we work to find creative solutions, one cannot overlook the importance of the millions of dollars allocated each year to finance affordable housing development, and the impact of those investments.

Established by Congress in 1986 to spur the development and preservation of low income housing – the Low Income Housing Tax Credit (LIHTC) has led to the creation or preservation of approximately 58,000 rental units in Colorado. In 2018, the federal and state programs directly supported 3,489 affordable rental units, supported over 6,800 jobs and spurred $1.1 billion in economic impact.

In order for LIHTCs to reach developers, an agency was needed to allocate the tax credits. Created in 1973 by the Colorado General Assembly to address the shortage of affordable housing, CHFA is the designated state allocating agency, charged with implementing LIHTC in Colorado. With a belief that all Colorado residents deserve the opportunity for housing stability and economic prosperity, Colorado Housing and Finance Authority (CHFA) has invested nearly $19 billion into affordable housing and community development. The statewide authority is a self-funded institution, and has provided financial support to all 64 counties in Colorado. CHFA has three programmatic areas of focus, each of which directly support Colorado residents, businesses and the economy as a whole. CHFA’s focus includes: homeownership, rental housing and business finance.

”CHFA is guided by our aspirational vision that everyone in Colorado will have the opportunity for housing stability and economic prosperity. As a mission-based organization, everything we do is to position ourselves to better meet our mission and realize our vision,” said Cris White, Executive Director and CEO of CHFA. “We are here to help Coloradans live affordably and offer opportunities for businesses to thrive. If someone can afford their rent or mortgage payment, then they’re better prepared for other living expenses like food, healthcare, and education. If a business has access to capital to grow, it is better equipped to succeed and support jobs.”

In 2018, CHFA’s homeownership programs assisted 8,322 Coloradans to become homeowners. In partnership with a statewide network of more than 100 lenders, CHFA is able to provide fixed rate mortgage loans and down payment assistance. The organization also sponsors homebuyer education classes across the state (in both English and Spanish) to assist prospective homebuyers in areas such as financing, budgeting and navigating the loan process. According to CHFA, over 13,000 households enrolled in these classes in 2018 alone, demonstrating a high demand for home buyer education.

One of CHFA’s most recognized programs focuses on affordable rental housing. Tax credits are the source for every one of ULC’s affordable housing developments, the result being hundreds of new permanently affordable rental units for households earning up to 60 percent of Area Median Income (AMI). As one of the many affordable housing advocates in the Greater Denver region, ULC recognizes the critical role CHFA plays in determining feasible projects for development and/or preservation. Along with our development partners and investors, we are grateful for their nationally recognized leadership in the LIHTC allocation process.

“CHFA is one of the most important entities in Colorado’s affordable housing realm,” said Aaron Miripol, ULC President & CEO. “To date, ULC’s developments have provided affordable housing for 1,200 residents, leveraged over $700 million in economic development and created 2,000+ jobs. Much of ULC’s mission is reliant upon the creation and preservation of affordable housing, so our success should be shared by CHFA.”

Since the creation of LIHTC in 1986, CHFA has been charged with the program design and implementation of tax credits in Colorado. The program functions by providing a federal income tax credit to investors to incentivize funding and spur development.  To receive tax credits, projects must include income and rent restrictions, both of which are based off of the Area Median Income (AMI). According to federal LIHTC program minimum requirements, at least 40 percent of an affordable development must be reserved for families earning at or below 60 percent AMI or 20 percent reserved for families earning at or below 50 percent AMI. Rent restrictions are determined based upon a combination of AMI and the number of bedrooms. For example, a family of four living in Denver and making 40 percent AMI ($35,960) should pay no more than $935 per month for a three bedroom apartment.

In addition to awarding the federal tax credits, CHFA also manages the state Affordable Housing Tax Credit (AHTC) program. Last year, the Colorado affordable housing tax credit received an extension through 2024. The extension was the result of bipartisan support, and is an extremely critical resource for affordable housing at the statewide level. AHTC has supported the development or preservation of over 4,000 affordable rental housing units since originally being renewed in 2014.

In 1982, CHFA’s programming expanded when it received the authority to make commercial loans to support local businesses. This is now a permanent component of CHFA’s mission, investing nearly $50 million in 2018 to support 747 businesses and nonprofits. These investments spurred economic growth and supported over 4,200 jobs. CHFA’s business lending focuses on small to medium size businesses, ranging from healthy food grocers to manufacturers. One specific program worth highlighting is the Colorado Credit Reserve Program. The program was designed to encourage banks to extend credit to small and medium size businesses, and recently surpassed the $100 million mark in loans supported since 2009.

CHFA continues to support local, regional and statewide efforts to address equity and affordability for all residents, businesses and nonprofits and ULC is one of many beneficiaries that can celebrate a CHFA partnership. In 2018, ULC and CHFA partnered on a new financial resource as the Metro Denver Impact Facility (MDIF) launched, a source of loan capital to support the creation and preservation of permanent affordable housing, community facilities and affordable commercial space in transit-accessible locations throughout the Greater Denver region. After successfully creating, expending and paying back 9 of the 12 loans from two revolving loans funds between 2010 and 2015, ULC recognized the need for a new source of financing to address the growing disparities in Metro Denver’s housing sector. In late 2017, FirstBank signed on as senior lender, committing $25 million in loan capital and the capacity to manage MDIF locally. CHFA joined as a junior lender in 2018, providing $2.5 million to support acquisitions using MDIF. CHFA’s participation as a junior lender allowed ULC to acquire three properties using MDIF in 2018, including Harlan Nonprofit Center, South Platte Crossing and Inca Commons. Each acquisition directly aligns with ULC’s mission to preserve critical community serving space and land bank real estate for future permanent affordable housing.

“MDIF represents the kind of collaboration and innovation needed to strengthen communities is an important resource that will help strengthen Denver Metro communities in various ways,” said White. “CHFA is proud to be among the investors of this innovative partnership.”

As CHFA looks to the future, the organization remains focused on its aspiration that every Colorado resident has the opportunity for housing stability and economic prosperity. CHFA is continuously identifying new and innovative solutions to achieve its mission of strengthening Colorado through investments in the affordable housing and community development sectors. As a longstanding partner, ULC recognizes the important role CHFA continues to play year after year in supporting Coloradans in need. We are proud to partner with CHFA in affordable housing development and preservation (as we plan two affordable housing groundbreaking events this quarter), as well as the newly created Metro Denver Impact Facility. We look forward to many more years of continued partnership!