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City of Madison

Affordable Housing Fund to Support 400+ New Homes

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The City of Madison’s Common Council has approved nearly $14 million from the Affordable Housing Fund to support the creation of approximately 425 new rental homes across the City, with more than 260 of those offering permanent affordability to lower-income households. 

This funding is the result of the Community Development Division’s annual Request for Proposals (RFP) for Affordable Rental Housing Developments, supporting development proposals that utilize federal low-income housing tax credits.

The Council approved gap financing loans for four projects recommended by the Community Development Division through this year’s Request for Proposals (RFP) Process. They include:

  • Concept image of United Residences Senior Apartments
    Image credit: Knothe Bruce Architects Concept Image

    United Residences Senior Apartments

    Up to $600,000 for United Residences Senior Apartments on the north side of Madison, which will include 24 units, 15 of which will be affordable (10 for up to 50% AMI, 5 for 30% or less AMI).

  • City of Madison Affordable Housing Fund

    Yellowstone Senior Apartments

    Up to $5,613,000 for Yellowstone Senior Apartments on the west side of Madison, which will include 130 units, 104 of which will be affordable (19 for up to 60% AMI, 56 for up to 50% AMI, 2 for up to 40% AMI, and 27 for 30% or less AMI).

  • Concept image of Ridgeway Senior Apartments
    Image credit: Knothe Bruce Architects Concept Image

    Ridgeway Senior Apartments

    Up to $5,250,000 for Ridgeway Senior Apartments on the near east side of Madison, which will include 91 units, 48 of which will be affordable (29 for up to 50% AMI, 19 for 30% or less AMI).

  • Concept image of the Fair Oaks Apartments proposal on E. Washington Ave.
    Image credit: Knothe Bruce Architects Concept Image

    Fair Oaks Apartments

    Up to $2,500,000 for Fair Oaks Apartments on the east side of Madison, which will include 177 units, 96 of which will be affordable (60 for up to 50% AMI, 36 for 30% or less AMI).

Totals

  • 422 New Homes
  • 263 Affordable Homes
  • 86 Supportive Housing Homes

Together, these projects will add a total of 422 new homes to Madison’s housing market, 263 of which will permanently offer some level of affordability to tenants. Eighty-six homes, one-third of those offering affordability, are designated as supportive housing and will serve households who have or are experiencing homelessness. 

Last year, the City awarded a total of $9.85 million in Affordable Housing Fund loans to four projects proposing to add 270 new homes, 167 of them for people making up to 60% of the Area Median Income. 

Next Steps

Before they receive these funds, developers will need to demonstrate that they have:

  • Secured enough financing to complete their projects, including securing Low-Income Housing Tax Credits from the Wisconsin Housing and Economic Development Authority;
  • Received all necessary land use and permit approvals from the City of Madison; and
  • Satisfied all other City requirements, including, but not limited to, providing a Tenant Selection Plan and Affirmative Marketing Plan that comply with the requirements of the RFP.

Funds were only available for projects that will use Low-Income Housing Tax Credits from the Wisconsin Housing and Economic Development Authority (WHEDA) and could demonstrate a need for gap financing to cover costs in excess of funding secured from other sources.  Funding is provided in the form of a loan. All financing details were outlined to prospective applicants in the 2025 RFP guidelines.

About the Process

For more than a decade, the City has used this competitive Request for Proposals process to expand housing options available to households earning less than 60% of the Area Median Income (AMI), with an added focus on homes for those with very low incomes of 30% AMI.

Currently, Dane County’s AMI is $90,900 for a single-person household, or $116,900 for a household of three people. That means homes designated to serve households at 60% AMI would be available to a single person earning $54,540 or a three-person household with income up to $58,450. Individuals earning $27,270 and a three-person household with $35,070 of income would quality for a 30% AMI home.

Area Median Income Percentages
Household Size30% AMI50% AMI60% AMI80% AMI100% AMI
1$27,270$45,450$54,540$72,720$90,900
2$31,170$51,950$62,340$83,120$103,900
3$35,070$58,450$70,140$93,520$116,900
4$38,940$64,900$77,880$103,840$129,800

What defines "affordable?"

Households at all incomes have a limit to what is affordable to them. Typically, the term "affordable housing" refers to housing that costs less than 30% of a household's income. When a household spends more than 30% of its income on housing, they are considered cost burdened. Households spending more than 50% of their household income on housing are considered severely cost burdened and are at high risk of homelessness.

Using that definition, this is what would be considered affordable monthly rents for a variety of income levels, as defined by the Wisconsin Housing and Economic Development Authority (WHEDA):

Affordable Rents by Income
Housing Type30% AMI50% AMI60% AMI80% AMI100% AMI
Efficiency/Studio$681$1,136$1,363$1,818$2,272
1 Bedroom$730$1,217$1,461$1,948$2,435
2 Bedroom$876$1,461$1,753$2,338$2,922
3 Bedroom$1,012$1,687$2,025$2,700$3,375

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