A state board awarded the remainder of grant funding Tuesday from the Housing Infrastructure Financing Program, while much of the program’s loan money remains available.
The program uses a mix of state and federal money to ease the burden of high inflation for homebuilders and address a need for workforce housing. Lawmakers created the program in 2023, after legal wrangling held up the funds the previous year. It covers up to one-third of the cost of a development’s roads, sewer lines, street lights and other costs associated with building new neighborhoods.
The funding pool included $50 million in federal COVID relief funding for grants, $50 million in state funding for grants, $100 million in state funding for loans, plus interest income earned by the funds.
The South Dakota Housing Authority Board awarded $1,077,604 — the remainder of interest-derived grant funds — to a water booster pump station project meant to increase water capacity to the Shepherd Hills development near Menards in eastern Rapid City. The total project costs $5.8 million and will provide water capacity to 78 single family lots and hundreds of multifamily lots within the undeveloped area, said Housing Development Authority Executive Director Chas Olson.
The board also approved a loan Tuesday of $625,000 to another Rapid City project. Stoney Creek Reserve plans to develop 25 single family home lots on the southwest edge of the city. The total project cost is $2.1 million.
The authority has awarded money to 74 projects from the fund so far. The funds will help create 7,043 new single family home lots and 5,127 new multifamily units.
The board has awarded $120.5 million after the December meeting and has about $86.3 million in loan funds available. About $2 million is reserved for an administrative fee for South Dakota Housing to run the program. The funds have garnered an extra $9 million due to interest.
Olson told South Dakota Searchlight earlier this year that demand for loans was lower as long as grants were available, and many of the grant-funded projects are now underway.
“As a result, contractors are occupied, and developers without ongoing projects might be waiting to see how quickly these new units are absorbed,” Olson said.
GET THE MORNING HEADLINES.