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. 

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 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	• 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 Colorado manufactured modular/off-site building technology if reasonably cost-competitive with traditional construction methods • 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

The application period for Concessionary Debt LIHTC Predevelopment is currently closed.

From September 16, 2024, through 5:00pm MT on October 15, 2024, applications were accepted for the Concessionary Debt Multifamily Finance and Concessionary Debt LIHTC Predevelopment loan options. During the application round, a total of 15 applications were received, representing more than $48 million in funding requests.

Following careful evaluation against the priorities established by the statute and program guidelines criteria, nine applicants representing a total of $27.3 million in funding requests were selected to move forward to full underwriting. Future opportunities for funding available through the Concessionary Debt program will be announced soon.

Please sign up for the Proposition 123 Affordable Housing Financing Fund eNews to be alerted to future funding opportunities.

September 9, 2024	Applications will be available on the Affordable Housing Financing Fund website.
September 16, 2024	Application submission period begins for Concessionary Debt Multifamily Finance and Concessionary Debt LIHTC Predevelopment.
October 15, 2024	Application submission period will end at 5:00pm MT.
January 2025	Funding selections will be announced.