Memphis is opening its checkbook to nudge more “missing middle” homes onto the market. The city is now taking applications for a new Middle-Income Housing Pilot that pays developers to build duplexes, townhomes and small multifamily buildings targeted to households earning roughly 80 to 120 percent of area median income.
Awards range from $60,000 to $350,000 per project, with support capped at $20,000 per unit. The online application window is open through 4 p.m. on March 27, 2026. In exchange for the public money, projects that receive MI-Pilot funds must sign a five-year affordability covenant that includes a cap of 3 percent per year on rent increases while the covenant is in effect.
What the pilot pays for
MI-Pilot funding is structured as a mix of partial grants and loans designed to help small infill deals actually make it from pro forma to construction. The program sets a minimum award of $60,000 and a maximum of $350,000 per project, reimburses recipients only after they hit approved milestones, and limits assistance to about $20,000 per unit, according to the MI-Pilot guidelines.
Who can apply and what they can build
Nonprofit and for-profit developers, community development corporations and CHDOs are all eligible to apply. Individual homeowners, however, are not eligible for direct funding under this pilot. Applicants can pitch new construction or rehabilitation of 2 to 10 unit structures, infill single-family homes or small apartment-style buildings, a menu of options that targets modest-scale projects while still adding density.
What “affordable” looks like
The MI-Pilot does not leave the numbers to guesswork. The city spells out attainable rent ranges that currently run from roughly $1,155 to $1,450 for a one-bedroom and about $1,700 to $2,000 for a four-bedroom. The guidance also recommends sale-price bands tied to area median income, requires a five-year affordability period enforced with a lien on the property, and limits rent increases to no more than 3 percent annually during that term, according to the MI-Pilot guidelines.
How to apply and the calendar
Developers must submit completed applications through the Neighborly online portal. The application window opened on Feb. 3, 2026 and will close at 4 p.m. on March 27, 2026, with city staff set to review submissions and send award notices in April, according to LocalMemphis. Alongside the main funding, the city is promoting a separate Pre-Development Assistance grant and informational workshops for emerging developers to help chip away at early site and utility costs that often stall smaller projects.
Why it matters
Memphis has a lot of households stuck in the uncomfortable middle. The city’s median household income sits at roughly $51,736, which leaves many residents earning too much for traditional low-income subsidies but still feeling the squeeze of rising housing costs, according to U.S. Census QuickFacts. City officials and local reporters say the MI-Pilot is meant to serve that group by encouraging modest-density homes in service-rich neighborhoods and by helping smaller, local developers build the kind of attainable housing that working families keep asking for.
