The U.S. Department of the Treasury announced new guidance this week to increase the ability of state, local, and tribal governments to use American Rescue Plan (ARP) funds to boost the supply of affordable housing in their communities. A Department of Treasury press release says the step follows a commitment in the Administration’s recently released Housing Supply Action Plan to leverage ARP funds for investments in affordable housing as part of a broader strategy to increase the nation’s housing supply and ease housing costs over time.

Treasury has previously encouraged governments to dedicate a portion of the $350 billion available to them under the State and Local Fiscal Recovery Funds (SLFRF) toward the development, repair, and operation of affordable housing units. New Treasury data shows that those efforts have yielded more than 600 state and local governments had budgeted $12.9 billion in SLFRF funds to meet housing needs and lower housing-related costs, through March 31, 2022. Those numbers include $4.2 billion for affordable housing development and preservation.

The recent updates build on this progress and are expected to help local officials fulfill and expand upon these commitments to boost the country’s supply of affordable housing and bring down costs over time.

“Increasing the nation’s housing supply is essential to lowering shelter costs over the long-term,” said Deputy Secretary of the Treasury Wally Adeyemo. “Treasury continues to strongly encourage state and local governments to dedicate a portion of the historic funding available through President Biden’s American Rescue Plan toward building and rehabilitating affordable housing in their communities and the actions being announced today will make it even easier for them to do so.”

For more information on the most recent updates, CLICK HERE.

Jerry Konter, chairman of the National Association of Home Builders (NAHB) and homebuilder and developer from Savannah, Ga., weighed in on the guidelines.

“NAHB commends the Biden administration and Department of Treasury for taking an important step forward to combat the nation’s housing affordability crisis by allowing state housing agencies to use State and Local Fiscal Recovery Funds to provide financing for Low-Income Housing Tax Credit (LIHTC) projects,” he said in a statement issued on the NAHB website. “This move to facilitate significant additional funding for affordable housing projects is something that NAHB has been fighting for and it will enable more multifamily developers to boost sorely needed production through the LIHTC. NAHB will continue to work with the Biden administration to solve the housing supply crisis to help builders produce more affordable single-family and multifamily housing.”