MIDDLE-INCOME HOUSING AUTHORITY

Fiscal Year 2025 Third Quarter Ending March 31, 2025

This quarterly report is published by the Middle-Income Housing Authority as required by C.R.S Section 29-4-1104 (14)(a) with support from the Office of Economic Development and International Trade (OEDIT). The Middle-Income Housing Authority (hereafter referred to as “MIHA” or “Authority”) was established by Senate Bill 22-232, amended by Senate Bill 23-035 and codified as the Middle-Income Housing Authority Act, Sections 29-4-1101 et seq., C.R.S. (the “Act”). MIHA has an administrative contract with OEDIT through June 30, 2027 with an option to renew.

Per Statute, the Authority shall submit quarterly reports to the Governor, the State Auditor, the Senate Committees on Finance and Health and Human Services, the House of Representatives Committees on Finance, Health and Insurance, and Public and Behavioral Health and Human Services.

For questions or requests related to this report, please contact:

Hannah Gutner 

Legislative Liaison 

Office of Economic Development and International Trade (OEDIT)

Hannah.Gutner@state.co.us 

Hilary Cooper

Director of Innovative Funding for Housing

Office of Economic Development and International Trade (OEDIT)

hilary.cooper@state.co.us

Executive Summary

MIHA is a special purpose authority independent from the state whose purpose is to promote affordable rental housing projects for the middle-income workforce throughout Colorado. MIHA is a body corporate and political subdivision of the state, but not an agency of the state and is not subject to administrative direction by any department, commission, board, bureau, or agency of the state. Per the Act, MIHA’s Board of Directors may authorize tax exempt bonds to finance affordable workforce housing projects serving families and individuals at 80% - 120% AMI, or higher if there is a demonstrated need. If a tax exempt bond is issued for the project, MIHA will own and oversee operations of the units financed with the tax exempt bonds. MIHA is not subject to TABOR revenue and spending limits.

The Authority's income and property are exempt from state and local taxation and assessments and its purchase and use of property is exempt from state and local sales and use taxes subject to approval by the local taxing jurisdictions. MIHA has a local government notification process, during which local governments are allowed to comment, support, oppose or request payment in lieu of taxes for the projects in their jurisdictions. MIHA is an instrumentality of the state for federal income tax purposes.

In September 2022, the Governor appointed the original 12 members to the board and the Executive Director of OEDIT and the Director of the Division of Housing (DOH) appointed one member each. The Board held its first meeting on October 21, 2022 and meets monthly. In June 2023, SB23-035 amended certain provisions of the Act and added two non-voting Board members appointed by the Senate Majority Leader and the House Majority Leader from the General Assembly. More information on Board members and meetings can be found at: https://oedit.colorado.gov/middle-income-housing-authority.

In accordance with the Act this report contains a quarterly financial statement of the Authority for the period of December 31, 2024 - March 31, 2025. MIHA operates on the fiscal year as opposed to the calendar year. In addition, this report includes a summary of operations, key highlights of actions taken and actions necessary to carry out the Authority’s purpose during this period.

The Authority’s primary funding/support options are limited to issuing revenue backed tax-exempt bonds, state and local tax exemptions for affordable housing developments if authorized by local governments, and entering into public-private partnerships.

MIHA was initially supported with $1 million for administrative and organization expenses, but no project funding.

Successful projects will be issued tax exempt bonds, based on the ability for the project revenue to service the debt and be funded with private sector capital. MIHA may also be a limited partner in a public-private or public-public partnership in order for the project to secure tax exemption. The projects will serve a diverse swath of developer entities, geography, and workforce income levels. The Authority is directed to select up to 3,500 units and report back to the General Assembly with a comprehensive evaluation report on the Authority’s impact on middle-income individuals and families and on housing of all types in the State. The report will include recommendations on the future of the program.

Key Statutory Dates & Reports

● Sept 1, 2022 - Initial Board Appointments 

● Oct, 21, 2022 - Initial Board Meeting Held

● April 1, 2023 - Solicitation of pilot project proposals launched

● July 1, 2023 - Complete review and conditional selection of pilot projects 

Quarterly Reports

• Fiscal Year (“FY”)23 Quarter (“Q”)2 December ‘22 (submitted)
• FY23 Q3 March ‘23 (submitted)
• FY23 Q4 June ‘23 (submitted)
• FY24 Q1 September ‘23 (submitted)
• FY24 Q2 December ‘23 (submitted)
• FY24 Q3 March ‘24 (submitted)
• FY25 Q1 September ‘24 (submitted)
• FY25 Q2 December ‘24 (submitted)
• FY25 Q3 March ‘25 (presented)

Annual Reports

• FY23 Annual Report - December 31, 2023 (submitted)
• FY24 Annual Report - December 31, 2024 (submitted)
• FY23 Annual Audit - Submitted to the Office of the State Auditor on February 26, 2024
• FY24 Annual Audit - Submitted to the Office of the State Auditor on February 25, 2025
• Pilot Program Report - Due upon selection/construction of 3,500 units

Quarterly and Annual Reports can be found on coloradoMIHA.com.

Program Updates for FY25 Q3 (January 2025 - March 2025)

The Authority launched the initial project solicitation process in April 2023 and conditionally selected six projects on June 30, 2023 in compliance with the July 1, 2023 deadline established by SB22-232 (see project updates below).

MIHA’s administrative contractors and financial advisor saw an increase in inquiries from the conditional awardees and potential applicants. Due to a continued lack of public and private gap funding resources for middle income projects and ongoing high interest rates, there is a growing interest in pairing Proposition 123’s Equity program funds with MIHA’s tax exempt bond capacity. Prop 123 Equity allows for a 90% AMI average which can align with MIHA’s AMI’s. MIHA’s updated application process recommends that project teams consult with MIHA’s financial advisor before submitting the Initial Application to determine the financial feasibility of the project. After submitting a complete Initial Application, MIHA’s financial advisor and OEDIT administrative staff reviews the project for basic compliance and financial feasibility. The project is presented to the board who provides direction to either invite the applicant to submit a Final Proposal or provides feedback to the project team.

The Prop 123 Fiscal Year 2025 Equity Program deadline was March 31st, which resulted in an increased consultation with projects that intended to apply for Prop 123 Equity. As the manager of Prop 123’s Affordable Housing Finance Fund which funds the Equity Program, OEDIT requested that CHFA (Prop 123 Administrator) set aside $15 million of the $55 million allocated to the Equity round for MIHA projects. CHFA started application evaluations in April 2025 and the results will be reported in the next Quarterly Report.

Organizational Updates

Board Updates: At the January 2025 Board Meeting the board reviewed a staffing report provided by Center for Public Enterprise (CPE) an organization focused on broadening the public sector capacity specifically in the areas of housing, energy and finance. CPE is working with MIHA at no cost because it is invested in MIHA’s success as a model for other states. CPE’s report recommended a $450,000 annual staff expense in addition to organization expenses or utilizing consultants that might range from $200,000 to $500,000/year. MIHA’s FY23 expenses were $468,115 which included $340,000 in consulting fees to build the initial application process. FY24 expenses were approximately $200,000 and FY25 is on track to be the same. OEDIT is substantially discounting administrative expenses for MIHA.

MIHA’s Finance Subcommittee met in February 2025 to discuss administrative and project gap funding options. The Subcommittee decided to report to the full board with a recommendation to amend SB25-167 - Invest Funds to Benefit Communities to allow an increase to OEDIT’s Prop 123 administrative fee and authorize OEDIT’s Executive Director to direct funds to MIHA for administrative expenses as needed. In addition, the Subcommittee will recommend that the Board support the project funding for MIHA included in the bill with minor changes.

At the March 2025 Board Meeting the board approved Resolution 2025-01 - Statutory Interpretation of Application Criteria to make it clear that a project that was not applying for a MIHA tax exempt bond was not required to submit a capital stack with a MIHA bond. In addition, OEDIT staff presented the FY24 Annual Audit and the Finance subcommittee reported on the February meeting discussion. The Board agreed on the recommendations from the Subcommittee and directed OEDIT staff to continue to work on legislative solutions for administrative and project funding.

Financial Updates

As of March 31, 2025 MIHA had $149,362 in the Treasury account, which is a balance from the initial $1 million for administrative expenses funds allocated in SB22-232. In addition, MIHA had $80,052 in its operating account. MIHA's sole source of revenue will be project fees and project revenues.

Table of Fiscal Year 2025 Quarter 3 Budget and Expenditures

Budget Update
Due to the uncertainty of additional administrative funding from the state legislature, OEDIT staff is reducing administrative expenses, while supporting projects to move forward. In addition, MIHA is exploring alternatives to state administrative funding to keep MIHA funded adequately until projects start to generate revenue.

Project Updates
After the MIHA Board passed the Nuche Village Inducement Resolution in December 2024, MIHA’s financial advisor, Sierra Management Group, proceeded with the bond underwriting for the project. In addition, OEDIT staff and Sierra Management Group is working with 602 Galena in Frisco on a conduit bond issuance of a 501c3 bond and a Special Limited Partnership with the NHP Foundation to secure state and local tax exemption for the project and a new project called West Holden Place in Denver, which is seeking a Special Limited Partnership with MIHA to secure state and local tax exemption. Staff is also in discussions with several projects who intend to apply for FY25 Prop 123 Equity.  

Table of MIHA Conditionally Selected Projects

Quarter 3, FY 2025 Meetings

• January 24, 2025 (Board Meeting)
• February 28,2025  (Finance Subcommittee Meeting)
• March 28, 2025 (Board Meeting)

For more information on the Middle-Income Housing Authority, including upcoming Board meetings and agendas, visit oedit.colorado.gov/middle-income-housing-authority and coloradomiha.com.