Can a Florida housing finance authority grant surplus funds to a 501(c)(3) like Habitat for Humanity to renovate a thrift store that funds affordable housing?

Plain-English summary

The Polk County Housing Finance Authority asked whether it could grant surplus funds to Habitat for Humanity of East Polk County to renovate a Habitat ReStore. The ReStore is a thrift-type retail operation: Habitat sells used furniture, building materials, and home goods, and channels all the proceeds back into building affordable houses. In recent years the ReStore had generated roughly 19% to 21% of Habitat's annual budget. Habitat told the Authority that with the renovation, it could grow from building 6 to 8 homes a year to at least 12.

The AG concluded the grant was authorized. Section 159.608(10)(a) lets a housing finance authority "make loans or grant surplus funds to corporations that qualify as not-for-profit corporations under s. 501(c)(3) of the Internal Revenue Code … for the development of affordable housing." Because the renovation funded would directly enable Habitat to develop more affordable housing, the AG concluded the grant fit within both the literal text of (10)(a) and the broader purposes of the Florida Housing Finance Authority Law.

The opinion fits a pattern: the AG has repeatedly read § 159.608 broadly. AGO 2000-14 approved mortgage loans to individuals buying apartment complexes for low-income tenants. AGO 2009-17 approved loans of surplus funds to private for-profit entities developing affordable housing.

Currency note

This opinion was issued in 2018. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: What is a Florida housing finance authority?
A: It is a special-purpose government body created under § 159.604 to address the shortage of housing and investment capital in a county. The Polk County Housing Finance Authority was established by Polk County Ordinance No. 78.20.

Q: What did § 159.608(10)(a) actually authorize at the time?
A: It authorized housing finance authorities to make loans or grant surplus funds to 501(c)(3) corporations "for the development of affordable housing." The AG read "for the development of affordable housing" to cover indirect support, like funding a revenue-generating thrift store whose proceeds went entirely to building homes.

Q: Was the indirect link to construction enough?
A: The AG concluded yes, where the grantee documented that the funded asset (here, the ReStore) was effectively a revenue engine for housing construction and would measurably increase the number of affordable houses built. The statute did not require that the surplus funds pay for hammers and lumber directly.

Q: What about housing finance authorities lending to for-profit developers?
A: A different subsection, § 159.608(10)(b), addresses that. AGO 2009-17 concluded that subsection authorized loans of surplus funds to private for-profit individuals or entities to develop affordable housing.

Q: Were there constitutional concerns with public funds going to a private nonprofit?
A: The Legislature addressed that head-on in § 159.602(3), declaring that the financing, acquisition, construction, reconstruction, and rehabilitation of housing are "exclusively public uses and purposes for which public money may be spent, advanced, loaned, or granted and are governmental functions of public concern." The Florida Supreme Court upheld the underlying scheme in State v. Housing Fin. Auth. of Pinellas County, 506 So. 2d 397 (Fla. 1987).

Background and statutory framework

The Florida Housing Finance Authority Law (§§ 159.601–159.623) creates housing finance authorities at the county level to alleviate housing shortages and to provide investment capital where private markets fall short. Section 159.602(3) is the legislative-findings clause: it raises housing finance to a "public use" so that public funds can be expended consistent with article VII, § 10 of the Florida Constitution, which restricts public lending of credit to private parties.

Section 159.608 lists the authority's powers. The relevant subsection here, (10)(a), authorizes loans or grants of surplus funds to 501(c)(3) corporations for affordable-housing development. The AG's office had previously read § 159.608 powers broadly:

• AGO 2000-14: housing finance authorities can operate "in a variety of capacities" to accomplish the act's purposes; § 159.608(3) authorized mortgage loans to individuals buying an apartment complex to rent to low-income families.
• AGO 2009-17: § 159.608(10)(b) authorized loans of surplus funds to private individuals or entities for for-profit affordable housing.

Against that backdrop, AGO 2018-03 was a relatively easy extension: a 501(c)(3) was the grantee, the funded asset (the ReStore) had a documented track record of generating 19-21% of the grantee's housing-construction budget, and the grant would push annual housing output up by at least 50%.

Citations and references

Statutes:
- § 159.601 et seq., Fla. Stat. (Florida Housing Finance Authority Law)
- § 159.602, Fla. Stat. (Legislative findings)
- § 159.604, Fla. Stat. (Authority creation)
- § 159.608, Fla. Stat. (Powers of housing finance authorities)

Cases:
- State v. Housing Fin. Auth. of Pinellas County, 506 So. 2d 397 (Fla. 1987)

Prior AG opinions:
- Op. Att'y Gen. Fla. 2000-14
- Op. Att'y Gen. Fla. 2009-17

Source

• Landing page: https://www.myfloridalegal.com/ag-opinions/housing-finance-authority-funding-renovations
• Original PDF: https://www.myfloridalegal.com/print/pdf/node/1489

Original opinion text

Mr. David G. Fisher

Counsel for the Housing Finance

Authority of Polk County, Florida

Peterson & Myers, P.A.

Post Office Drawer 7608

Winter Haven, Florida 33883-7608

RE: HOUSING FINANCE AUTHORITY – GRANT OF SURPLUS FUNDS TO NONPROFIT – whether a housing finance authority may grant funds to Habitat for Humanity, a nonprofit corporation, for renovation of one of its Habitat ReStores, which sells used furniture, etc. § 159.608, Fla. Stat. (2017).

Dear Mr. Fisher:

We are in receipt of your letter on behalf of the Housing Finance Authority of Polk County, Florida, requesting an opinion on the following question:

Can the Housing Finance Authority of Polk County, Florida, pursuant to section 159.608(10)(a), Florida Statutes, make a grant to Habitat for Humanity of East Polk County, Inc., a not-for-profit corporation, for the renovation of its Habitat ReStore, which will act as a revenue generator for Habitat's development of affordable housing?

In sum:

Under section 159.608(10)(a), Florida Statutes, the Polk County Housing Finance Authority is authorized to grant surplus funds to Habitat for Humanity for the renovation of its ReStore, which, once renovated, will generate revenues that will permit Habitat to increase the number of affordable houses it can build within Polk County.

You state that the Housing Finance Authority of Polk County, Florida, was established to alleviate and remedy the shortage of housing and of capital for investment in housing in Polk County pursuant to Polk County Ordinance No. 78.20 and section 159.604, Florida Statutes. Habitat for Humanity ("Habitat"), a nonprofit corporation under section 501(c)(3) of the Internal Revenue Code of 1986, as amended, and under the laws of the State of Florida, builds affordable housing throughout East Polk County. Habitat has asked the Housing Finance Authority of Polk County for a one-time grant to assist Habitat in renovating one of its Habitat ReStore ("ReStore") locations in East Polk County. ReStore sells new and gently used furniture, home accessories, appliances, building materials, etc., to the public at a discounted rate. All of the proceeds from sales go to Habitat, which uses such proceeds for the development of affordable housing. In the 2015-2016 fiscal year, ReStore generated $178,814.00 for Habitat, which was 19.14 percent of Habitat's annual budget, and in 2016-2017, generated $271,133.00, or 21.16 percent of Habitat's budget that fiscal year.

Habitat generally builds six to eight houses annually in East Polk County, and expects to build at least 12 houses annually once the ReStore has been renovated. Without the proposed renovations to ReStore, it is projected that Habitat will not have sufficient staff support to build more than six to eight houses per year.

The Legislature authorized the creation of housing finance authorities for the purpose of carrying out the powers granted in the Florida Housing Finance Authority Law, sections 159.601 through 159.623, Florida Statutes. In section 159.602(3), Florida Statutes, the Legislature found that the "financing, acquisition, construction, reconstruction, and rehabilitation of housing … are exclusively public uses and purposes for which public money may be spent, advanced, loaned, or granted and are governmental functions of public concern."[1]

Section 159.608, Florida Statutes, sets forth the powers of housing finance authorities, and specifically includes the following power:

"(10)(a) To make loans or grant surplus funds to corporations that qualify as not-for-profit corporations under s. 501(c)(3) of the Internal Revenue Code of 1986, as amended, and under the laws of this state, for the development of affordable housing[.]"

This office stated in Attorney General Opinion 2000-14 that "housing finance authorities may operate in a variety of capacities in order to accomplish the purposes of the act." For example, in Attorney General Opinion 2000-14, this office concluded that section 159.608(3) authorized the provision of mortgage loans to individuals for the purchase of an apartment complex to be rented to low-income families or individuals. In Attorney General Opinion 2009-17, this office found that section 159.608(10)(b) authorized the loan of surplus funds to a private individual or entity in order to develop affordable housing for profit.

You have represented that a grant of surplus funds to Habitat for Humanity for the purpose of renovating the ReStore, which provides Habitat with all of its proceeds, will allow Habitat to go from building six to eight affordable houses per year, to being able to build at least 12 affordable houses per year. It is my opinion that this satisfies the criteria in section 159.608(10)(a) and the purposes of the Housing Finance Authority Law, thus authorizing such grant of funds.

Sincerely,

Pam Bondi

Attorney General

PB/tebg

[1] See also State v. Housing Fin. Auth. of Pinellas County, 506 So. 2d 397, 399 (Fla. 1987).