The Concessionary Debt LIHTC Gap Finance program provides subordinate debt financing to eligible for-profit and nonprofit entities, local governments including housing authorities, and tribal governments for the creation of affordable multifamily rental housing developed with Federal Low Income Housing Tax Credits.
Please note: Shovel-ready projects that result in the construction of new units will be prioritized during the first year of program funding.
Program Details
09-28-2023
Program Benefits | • Subordinate gap financing • Below-market interest rates • Flexible repayment terms |
Eligible Borrowers | • For-profits • Nonprofits • Governmental entities, including housing authorities • Tribal governments |
Eligible Projects | Developments that have received an award of Low Income Housing Tax Credits and/or Colorado state Affordable Housing Tax Credits but have not yet converted to permanent financing |
Program Allocation | 15% to 35% of Affordable Housing Financing Fund (AHFF) allocation |
Area Median Incomes (AMIs) Served | • 60% average AMI for all restricted units • Up to 25% of the development’s units may be unrestricted but are excluded from eligible project financing |
Program Limits | Maximum gap loan size is limited to 1.05 debt service coverage when considering all must-pay debt, 90% of value or total development cost in combination with all must-pay debt, or $6,000,000, whichever is less. Loans may be limited to lower dollar amounts during the first year of program funding. |
Minimum Debt Financing | $400,000 |
Interest Rates and Fees | • 2.5% fixed rate • 1% origination fee • Standard loan closing costs |
Loan Repayment | Amortizing and non-amortizing loan structures available based on underwriting |
Collateral | Loans will be collateralized by the project assets. |
Affordability Restrictions | A Regulatory Agreement requiring affordability for the greater of the loan term or 20 years will be required. |
Priorities | • High-density housing • Mixed-income housing • Environmental sustainability |
How to Apply
Concessionary Debt Process and Timeline
Starting September 18th, applications will be accepted for the Concessionary Debt Multifamily Finance, LIHTC Gap Finance, and LIHTC Predevelopment Finance programs established by Proposition 123. CHFA received 38 applications representing more than $113M in funding requests (PDF). Following the application period, selections will be announced in January 2024.
The application window has closed for the LIHTC Gap Finance program.
Application Timeline:
September 18, 2023 | CHFA will begin accepting applications. |
October 9, 2023 | Application submission period will end at 11:59pm MT. |
January 2024 | CHFA will announce projects selected to receive Concessionary Debt funds. |
Helpful Links
- Concessionary Debt Application Submission List (PDF)
- LIHTC Gap Finance program flyer (PDF)
- LIHTC Gap Finance program guidelines (PDF)
- Training and resources
- Sign up for eNews
Contact
CHFA Community Development
Terry Barnard
Manager, Community Development Lending
303-297-4866
David Foust
Commercial Loan Officer III
303-297-4865
If you have questions, contact CHFA Community Development at [email protected].
