Why It Matters
Maryland faces a shortage of roughly 96,000 housing units, constraining economic opportunity and straining public resources. A proposed statewide housing revolving fund could provide a durable financing mechanism independent of annual budget cycles, allowing the state to leverage bond authority and private capital to accelerate affordable housing production.
What Happened
Governor Wes Moore’s administration has advanced a proposal to establish a Maryland housing revolving fund, framing housing as foundational to economic opportunity. The fund would be capitalized through state bond authority and would provide subordinate financing at below-market rates, covering 15% to 30% of project capital costs.
The proposal draws directly from a successful model in Montgomery County. The Housing Opportunities Commission created a $100 million Housing Production Fund using bond financing paired with matching county appropriations. By reducing private equity costs from 15%-20% to just 5%, the HOC fund has positioned itself to produce 6,000 residential units over a 20-year bond term, with 1,800 units projected to remain permanently affordable. Montgomery County also operates a complementary $14 million Affordable Housing Opportunity Fund, which attracted 3-to-1 private lending matches.
The state-level revolving fund proposal recommends an initial capitalization of $250 million. Officials in the governor’s office envision the fund operating as a permanent financing tool, replenishing itself through loan repayments and interest revenue while remaining independent of single-year budget pressures.
By the Numbers
$300 million — Maryland Department of Housing and Community Development housing investments in the current year
$250 million — recommended initial capitalization for the state revolving fund
15%-30% — percentage of project capital the fund would cover
$100 million — Montgomery County Housing Opportunities Commission fund size
6,000 — residential units projected from Montgomery County HOC fund over 20 years
1,800 — permanently affordable units projected from HOC fund
$14 million — Montgomery County Affordable Housing Opportunity Fund
96,000 — Maryland’s housing unit deficit
Zoom Out
Revolving housing funds have gained traction across the country. State-level funds operate in Michigan, Massachusetts, and New York; New York’s $100 million fund attracted $115 million in private capital. Municipal and regional funds have proliferated as well. Montgomery County’s HOC model inspired similar initiatives in Atlanta and Chicago. Nashville’s mayor recently proposed a bond-backed loan fund, while Austin voters approved $250 million in housing bonds in 2018 and an additional $350 million four years later. Columbus approved $50 million in bonds in 2019, followed by $200 million in 2022, and $500 million in November—a commitment that has helped create or preserve 7,000 affordable homes.
Most of Maryland’s current housing investments flow through the Federal Low Income Housing Tax Credit program, which is subject to annual allocations and federal policy shifts. A state-level revolving fund would provide a stable, in-state alternative.
What’s Next
The proposal requires action by Maryland’s legislature to authorize bond issuance and establish the fund’s governance structure. If advanced, the state would likely model operating procedures on the Montgomery County HOC experience, which has demonstrated the capacity to deploy capital efficiently and attract private co-investment. Implementation would likely extend into the 2027 fiscal year or beyond, pending legislative approval and bond market conditions.