The City of Iowa City encourages housing developers to review federal, state and local financing incentives that increase the supply and availability of affordable housing in Iowa City. Affordable housing incentives are generally available for housing that is occupied by low to modest income households. For rental properties this is typically for households under 60% of area median income and for homeownership it is typically for households under 80% area median income.
Details in the following summaries may have changed. Contact program administrators immediately for current deadlines and availability.
Density & Height Bonuses for Affordable Housing
For projects located in the Riverfront Crossings District, up to five floors of additional building height may be granted for projects that reserve a minimum of 15% of the dwelling units within the building as affordable or workforce housing, as defined by the City. Certain approval criteria must be satisfied. City Council approval is required for approval of more than two stories of bonus height.
In the Central Business Zones and the Riverfront Crossings District, a density bonus in the form of an exemption from the parking requirements may be granted by the City for dwelling units that are committed to the City’s assisted housing program or any other affordable housing program approved by the City. Up to 30% of the units within any one building may qualify for this exemption.
Contact Development Services, City of Iowa City, 410 E. Washington Street, Iowa City, IA 52240, 319.356.5230, email@example.com for more information.
HOME & CDBG Programs
The U.S. Department of Housing & Urban Development provides HOME Investment Partnerships Program (HOME) and Community Development Block Grants (CDBG) funds to states and localities -- often in partnership with local nonprofit groups -- to fund a wide range of activities including building, buying, and/or rehabilitating affordable housing for rent or homeownership. Housing providers may apply for City and/or state HOME funds through a competitive process.
City of Iowa City HOME/CDBG applications are available annually in December and applications are typically due in mid-January. If awarded funds, the funds are available after July 1. Contact Neighborhood Services, City of Iowa City, 410 E. Washington St., Iowa City, IA 52240, 319.356.5230, firstname.lastname@example.org for more information.
State of Iowa HOME funds: The Iowa Finance Authority administers the program for the State. Low-interest loans and grants are available to developers of affordable single-family and multifamily housing developments through several HOME program funding categories. Due date may vary from year to year.
Other Iowa Finance Authority housing programs can be found online here.
Contact Iowa Finance Authority, 2015 Grand Ave., Des Moines, IA, 50312, 515.725.4900, email@example.com for more information.
Federal Home Loan Bank of Des Moines
The Competitive Affordable Housing Program (AHP) is one of the largest sources of private sector grants for housing and community development in the nation. This competitive grant program encourages member financial institutions to partner with local housing providers (sponsors) to secure funds for the purchase, construction or rehabilitation of affordable owner-occupied or rental housing units. Projects serve low-to-moderate income households, and may include households with special needs including seniors, persons with disabilities and the homeless.
FHLB will make grant awards of up to $500,000 for qualifying homeownership and rental projects. Grants are available to project sponsors including nonprofits, governments, housing authorities and other qualifying organizations. Sponsors require the support of a FHLB Des Moines member financial institution to apply. Application and AHP Implementation Plan can be found online here.
Contact Federal Home Loan Bank of Des Moines, 801 Walnut Street, Suite 200, Des Moines, IA 50309, 515.281.1000 or 800.544.3452x1173, firstname.lastname@example.org for more information.
Housing Trust Fund of Johnson County – Revolving Loan Program
The Housing Trust Fund of Johnson County provides loans and grants for affordable housing projects in Johnson County. The housing must be occupied by households under 80% of median income. Eligible uses include the construction or rehabilitation of affordable rental, owner occupied, and transitional housing as well as shelter facilities.
Applications can be found at: http://www.htfjc.org
Contact: Housing Trust Fund of Johnson County, 322 E. 2nd Street, Iowa City, IA 52240, 319.358.0212, email@example.com for more information.
Iowa State Workforce Housing Tax Credits (IEDA)
Developers building or rehabilitating housing in Iowa may be eligible to receive certain state tax incentives if total project costs don’t exceed $200,000 per unit for new construction or $250,000 per unit for historic rehabilitation. Total program benefits are limited to a maximum of $1 million per recipient. Benefits include a refund of state sales, service or use taxes paid during construction and developers are eligible for an investment tax credit of up to a maximum of 10% of the investment directly related to the construction or rehabilitation of the housing. This tax credit is earned when the home or unit is certified for occupancy and can be carried forward for up to five additional years or until depleted, whichever occurs first.
- Applications also require a local City contribution of at least $1,000/assisted unit and a resolution of support. Contact City of Iowa City, Neighborhood Services to discuss.
- Apply online through www.iowagrants.gov.
Contact Iowa Economic Development Authority, 200 E. Grand Avenue, Des Moines, IA 50309, 515.725.3066, firstname.lastname@example.org for more information.
Low Income Housing Tax Credit
The Tax Reform Act of 1986 created the tax credit as an incentive for Housing Tax Credit project owners to invest in the development of rental housing for individuals and families with fixed or limited incomes. The Housing Tax Credit, rather than a direct federal subsidy, provides a dollar for dollar reduction (or credit) to offset an owner's federal tax liability on ordinary income for a 10-year period.
The credit is determined by taking a percentage of the "qualified" cost of development.
- The maximum percentage for new construction and rehabilitation is 9%. Applications are due in December annually.
- The maximum percentage for acquisition and federally subsidized projects is approximately 4%.
The 9% and 4% programs have separate application processes. Both can be found at www.iowafinanceauthority.gov.
Contact Iowa Finance Authority, 2015 Grand Ave., Des Moines, IA 50312, 515.725.4900, email@example.com for more information.
Brownfield sites are abandoned or underutilized industrial or commercial properties where real or perceived environmental contamination prevents productive expansion or redevelopment. Examples of Brownfield sites include former gas stations, dry cleaners, and other commercial operations that may have utilized products or materials potentially hazardous to the environment.
Grayfield sites are abandoned public buildings, industrial or commercial properties that are vacant, blighted, obsolete, or otherwise underutilized. A Grayfield has been developed and has infrastructure in place but the property's current use is outdated or prevents a better or more efficient use of the property.
If the property meets eligibility requirements, benefits include state tax credits of up to 24% for qualifying costs and 30% if the project meets green building requirements for Brownfield sites and state tax credits of up to 12% of qualifying costs and 15% if the project meets green building requirements for Grayfield sites.
Contact Iowa Economic Development Authority, 200 E. Grand Avenue, Des Moines, IA 50309, 515.725.3126, firstname.lastname@example.org for more information.