Federal Subsidies Create The Largest Affordable Housing Complex in the State

February, 1968

Northgate was built by a private developer between 1968-1969 using the HUD Below Market Interest Program (BMIR) authorized by the Housing Act of 1961.  Northgate provided affordable housing to a mix of low, very low, and moderate income families.

In a nutshell, a government housing program made Northgate possible and later would trigger its crisis of survival. The Housing and Urban Development (HUD) Below Market Interest Program (BMIR)* program helped create affordable housing across the United States by giving low-interest mortgages to private developers. Given a 1.5% interest rate on the mortgage the developers agreed to offer affordable rents for the life of the mortgage. Beyond that, the program had no long-term federal affordability requirements. If Northgate’s developers had been able to cash in after year twenty as they tried to do, the Northgate of today would not exist.

*The policy details: The HUD Below Market Interest Program (BMIR) was authorized by the federal Housing Act of 1961.  It stipulated affordability for a mix of low, very low, and moderate income families in exchange for a 1.5% interest mortgage, with the rate locked in for 20 years.  After year twenty, owners had the option to pay off the mortgage and then could do what they wished with the properties.

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