Low-Income Payment in Lieu of Taxes (PILOT)

There are three primary requirements to qualify for a Low-Income PILOT. These include:

  1. Qualifying Financing
  2. Serving low-income tenants
  3. Having an eligible ownership type

 

Qualifying Financing

The project must have "qualifying financing" which would be federal financing or a mortgage loan, advance, or grant from the Michigan State Housing Development Authority.  The "qualifying financing" must rent restrict the PILOT units for low-income tenants.  Two common forms of "qualifying financing" are: A) Low-Income Housing Tax Credits (LIHTC) along with some form of conventional loan, and B) a HOME Investment Partnerships Program (HOME) loan.

Serving Low-Income Tenants

The project must serve low-income households, the elderly, and/or handicapped.  A “low-income” household is defined as a household with:

  1. A total household income not greater than 60% of the area median income (AMI), adjusted for household size, as published by the Michigan State Housing Development Authority; or
  2. A total household income not greater than 80% of AMI when the household resides in a LIHTC unit and the LIHTC units in the project are rent restricted at various levels up to 80% of AMI but have an average rent restriction that is 60% AMI or less.

See Current AMI Chart(PDF, 20KB)

Eligible Ownership Type

The project must be owned by a “limited dividend housing association,” a “consumer housing cooperative,” or a “qualified nonprofit housing corporation.” 

PILOT Term 

The length of the PILOT term will be the term of the qualifying financing not to exceed fifty (50) years

PILOT Fee

1% of rent revenue + 3% of rent revenue to the City’s Affordable Housing Fund OR 4% of rent revenue 

Application Process

The City is preparing to move to an online application process.  Until this is in place, the Low-Income PILOT Application is in Microsoft Word format. 

Download Application(DOC, 232KB)

 

 

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