When company officials at Resia, a multifamily housing developer based in South Florida, first heard about a new Biden administration effort to provide low-interest loans for housing projects near transit stations, they thought it was a “very attractive opportunity.”
Gus Cabrera, the director of business development at Resia, said the loan could have helped finance a roughly $250 million project that would create 948 affordable housing units near a Metrorail station in Miami-Dade County.
But he pointed out several obstacles: Large projects needed to receive investment-grade ratings from two credit rating agencies, and he said going through the process could have cost nearly $800,000. The company would have also had to pay $250,000 upfront to the federal government for financial and legal advisers.
Mr. Cabrera said the company decided against pursuing the loan earlier this year because the application had been too “cost prohibitive,” and there had been no guarantee that it would have been approved.
A year ago, the Biden administration rolled out a plan to encourage affordable housing projects by unlocking more than $35 billion in lending capacity through existing low-interest loan programs. Developers that build housing near transit stations would now be able to access the loans, which would be offered by the Transportation Department.
But the effort has hit stumbling blocks. The administration has yet to close on any loans that would support housing-related projects. Although federal officials said they were on the verge of approving the first loan that would increase housing supply and they had taken steps to ease certain requirements, some developers said they had abandoned the process because the conditions had been too onerous and costly.
