Families paying more than 30% of their household income on rent are considered cost-burdened. By design, affordable housing stays below that threshold by structuring financing deals to involve (typically) a mortgage, tax credits, and two or three other sources of capital. Without subsidies it’s virtually impossible for developers to build homes that are affordable to low- or extremely low income families.
In Tennessee, and across the Nation, the impacts of this Affordable Housing Crisis are being felt.
Across Appalachia, most of the housing stock was built between 1970 and 2009. In fact, 772,641 homes were built between the years of 1970-1979 alone. Most of the houses built in the 70s, 80s and 90s have not been enhanced or seen substantial upgrades because economic conditions in the region prevented homeowners from saving or investing in their homes.
Appalachia faces many challenges as the Nationwide Housing Crisis continues to grow. Across Rural and Urban areas in Kentucky, Virginia, West Virginia, Alabama and Tennessee, the need for affordable housing is affecting moderate and low-income homes. The challenges found in these communities include a lack of developers and builders, the decreasing value of homes, high rental prices and lack of rental units.
In Tennessee, 26.4% of households are cost-burdened, which means that those households spend more than 30% of their incomes on housing and 12% of households are severely cost-burdened and those households spend more than 50% of their income on housing.
This is not just a rural problem. In both urban and rural communities demand and intense competition for affordable units has driven up rental prices. In rural areas, rental prices are affected by the relative lack of rental opportunities to be found.
Pathway Lending provides a solution. 
Pathway Lending has low-interest financing to encourage rehabilitation of multifamily properties (4 or more units) in communities across Tennessee. The rehabilitation of older buildings, like motels or small-scale apartments, as well as larger LIHTC properties and those buildings aging out of federal tax credits qualify for our affordable multifamily housing loan program.
With competitive rates, higher LTV, creative financing and a think outside the box approach, Pathway provides long-term, permanent financing for the acquisition, development, rehabilitation, and refinance of affordable and mixed-income multi-family housing in Tennessee.
To learn more about Pathway’s Multi-family Housing loans, you can contact Nicole Robben, Director of Commercial Real Estate.
