Financing

There are three primary types of funding that may be required for a supportive housing project.

Capital Funding

In projects that include building (or developing) new units of supportive housing either through new construction or acquisition/rehabilitation, the capital funding refers to those costs associated with acquiring, creating, and/or rehabilitating housing units. These costs are sometimes referred to as “brick and mortar” costs.

Operating Funding

Operating funding refers to the costs of operating and/or maintaining the housing or physical component of supportive housing. Operating costs in a project owned by a housing sponsor include all costs of maintaining the project once it is ready for occupancy, such as property management, utilities, maintenance, insurance, security, debt service or other loan payments, and operating and replacement reserves.

Projects that include units of housing leased by the sponsor (either single-site or scattered-site) may have ongoing operating costs, depending upon the terms of the lease with the property owner. 

Projects in which the partners do not have any ongoing responsibility for housing operations must still ensure that tenants have access to housing units that are affordable based on income. This is typically accomplished through a rent subsidy, which covers the gap between an affordable tenant rent (usually 30% of income) and a reasonable rent in the community.

Supportive Services Funding

Supportive services funding refers to the cost of providing tenants with the needed support to sustain housing stability and meet life goals. These services typically include case management focused on keeping tenants in housing, as well as a range of additional services such as mental health or substance abuse counseling, employment services, peer support and primary health care.

 

We also have the following sample budgets, Supportive Housing with Re-Entry Units, Scattered-site Housing with Re-entry Units, First Year Budget, Second Year Budget.

To learn more about each type of funding, click on the corresponding link.

Capital Funding

Operating Funding

Supportive Services Funding

Go to the quality toolkit Table of Contents.

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