A new housing fund in Chattanooga hopes to add affordable and mixed-income housing to the city by providing loans to help projects through the construction phase.
The fund plans to provide loans for new rental projects for up to 25% of construction costs at a 5% interest rate. It will be run by a nonprofit government subsidiary called Invest Chattanooga, governed by a board and a chief executive, yet to be hired.
In exchange, at least 30% of the units built with the loans must be permanently rented at affordable rates — meaning a tenant can rent them for 30% or less of their total monthly income.
(READ MORE: Chattanooga will donate 11 city properties for affordable housing projects)
“We’re getting affordability at a substantial discount, and we’re getting it in perpetuity,” Nicole Heyman, the city’s chief housing officer, said in an interview with the Chattanooga Times Free Press editorial board.