HIP Tool: Local Housing Fund

A local housing fund provides a dedicated source of funding for affordable housing projects. Jurisdictions can use the funds in a variety of ways:

  • Direct loans or grants to owners or developers of affordable housing.
  • The underwriting of general obligation or councilmanic bonds sold to support low-income housing.
  • Direct low-income renter or first-time homebuyer subsidies.

Typically, a local housing fund is established through a legislative process that generates fund revenue (e.g., a special purpose housing levy enacted through voter approval, general funds, or a portion of sales tax from new development).


Local housing funds have become increasingly popular with local jurisdictions. Financing for affordable housing involves layering funding sources with unique affordability criteria whose timelines and affordability limitations sometimes pigeonhole affordable housing developers or make projects infeasible altogether. The flexibility of fund types makes them ideal for affordable housing developers and useful to large and small jurisdictions alike. Although funds have unique components, local housing funding sources are specific vehicles by which government entities can consistently address the shortage of funding for affordable housing. The resolution, ordinance or legislation establishing the local housing fund specifies the priorities, key elements and implementation of the fund based on community needs.

Commercial linkage fees can serve as a designated revenue stream for a local housing fund. Local jurisdictions can also pool resources through a shared local housing fund with interjurisdictional cooperation. Partnerships with non-profit developers can also be built with through a local housing fund by providing technical assistance or direct loans or grants to developers of affordable housing.

Tool Profile

Focus Areas

  • Urban Centers
  • Transit-Oriented Development
  • Expensive Housing Markets
  • Innovative Single Family Techniques

Project Types

  • Single Family
  • Multifamily
  • Ownership
  • Rental
  • Subsidized

Affordability Level

  • 80 to 120% AMI
  • Less than 80% AMI

Housing Goal

  • Affordability