Low Income Housing Tax Credit (LIHTC) Predevelopment Finance

Concessionary Debt Low Income Housing Tax Credit (LIHTC) Predevelopment Finance provides predevelopment loans to eligible for-profit and nonprofit entities, local governments including housing authorities, and tribal governments to finance feasibility expenses of affordable multifamily rental housing developed with federal Low Income Housing Tax Credits. 

Program Detail	Description
Eligible Projects	Developments that qualify for federal Low Income Housing Tax Credits
Program Benefits	• Predevelopment loans available for projects that qualify for federal Housing Tax Credits • Below-market interest rates
Program Allocation	Program funding is 15% to 35% of total Financing Fund allocation
Eligible Borrowers	For-profit, nonprofit, governmental entities including housing authorities, and tribal governments
Program Limits	Maximum predevelopment loan to a project is $750,000
Minimum Debt Financing	No minimum
Loan Repayment	• Interest-only payments • Principal due at earlier of close of construction loan or stated maturity date • Terms up to 36 months
Area Median Incomes (AMIs) Served	• Not to exceed 60% average AMI for all restricted units
Collateral	Predevelopment loans will be unsecured with recourse guaranties required from the borrower
Interest Rates and Fees	• 2.5% fixed rate    • Standard loan closing costs
Affordability Restrictions	None in addition to LIHTC requirements
Priorities	Statutory Priorities • High-density housing  • Mixed-income housing  • Environmental sustainability  Strategic Policy Priorities • Projects that construct new units. • Use of modular/offsite building technology produced in Colorado • Inclusion of home-based or commercial childcare facilities • Geographic diversity

This is intended only to highlight certain program requirements. Loans are subject to other requirements, including the CHFA Credit Policy and applicable operating and replacement reserve requirements. Please note that the programs are subject to change. Please see the Concessionary Debt LIHTC Predevelopment Finance Program Guidelines for more information.

Concessionary Debt Process and Timeline

Starting Thursday, November 20, 2025, applications and supporting materials will be accepted for the Proposition 123 Concessionary Debt Multifamily Finance, LIHTC Gap Finance, and LIHTC Predevelopment Finance loan options. The application period will close on Thursday, December 18, 2025, at 5:00pm MT. Please download and complete the application linked below and submit it to [email protected].

• Proposition 123 Concessionary Debt LIHTC Predevelopment Finance Application (XLSX)

Date	Description
November 20, 2025	CHFA will begin accepting applications.
December 18, 2025	Application submission period will end at 5:00pm MT.
January 2026	CHFA will announce projects selected to receive Concessionary Debt funds.