Subcommittee backs revolving loan fund substitute to boost housing construction financing

The Senate housing subcommittee voted to recommend reporting SB 490 as substituted, a proposal to establish a state revolving loan fund to support housing construction for low‑ and moderate‑income projects.

Sponsor testimony explained the substitute moves the proposed loan mechanism out of the Virginia Housing Trust Fund and creates a separate revolving fund administered by the Department of Housing and Community Development in consultation with Virginia Housing Development Authority. The fund is intended to provide lower‑cost, flexible loans that help projects secure additional private or public financing and increase overall housing production.

Supporters including the Virginia Housing Alliance and the city of Richmond said the tool could smooth financing cycles and help projects close financing gaps that keep many affordable developments from moving forward. The committee voted 4–1 to report SB 490 as substituted.