Low Income Housing Tax Credit (LIHTC) Predevelopment Finance


The Concessionary Debt LIHTC Predevelopment Finance program 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. 

Please note: Funding for predevelopment will be limited for the initial program year.

Affordable Housing Commitment

To be eligible, affordable housing projects seeking support from the Affordable Housing Financing Fund must be located in a jurisdiction that has completed a Proposition 123 Local Government Affordable Housing Commitment with the Colorado Department of Local Affairs − Division of Housing. Click here to learn more on DOLA’s website. View jurisdictions that have filed 2023 Commitments.

Program Details

09-28-2023

Program Benefits • Predevelopment loans available for projects utilizing federal Low Income Housing Tax Credits  
• Below-market interest rates    
Eligible Borrowers • For-profits  
• Nonprofits  
• Governmental entities, including housing authorities 
• Tribal governments 
Eligible Projects Developments that utilize Low Income Housing Tax Credits  
Program Allocation 15% to 35% of Affordable Housing Financing Fund (AHFF) allocation 
Area Median Incomes (AMIs) Served • 60% average AMI for all restricted units  
Program Limits Maximum predevelopment loan to a project is $750,000    
Minimum Debt Financing No minimum
Interest Rates and Fees • 3% fixed rate   
• Standard loan closing costs   
Loan Repayment   • Interest-only payments
• Principal due at earlier of close of construction loan or stated maturity date
• Terms up to 36 months
Collateral Predevelopment loans will be unsecured with recourse guaranties required from the borrower.  
Affordability Restrictions  None in addition to LIHTC requirements   
Priorities • High-density housing 
• Mixed-income housing 
• Environmental sustainability 
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.

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). Each application was evaluated against the criteria established in their respective program guidelines and from the directives in the Governor’s Executive Order from August 21, 2023. Priority criteria included the number of units (high density), environmental sustainability, geographic diversity, readiness to proceed, and economic diversity in the mix of unit income restrictions.

Based on these criteria and the limited amount of available funds, seven of the 38 applicants, representing $14.5M in funding requests, were selected to move forward (PDF) to full underwriting.

Funded projects will be announced in January 2024.

Application Timeline:

September 18, 2023CHFA will begin accepting applications.
October 9, 2023Application submission period will end at 11:59pm MT.
January 2024CHFA will announce projects selected to receive Concessionary Debt funds.

Contact

CHFA Community Development 

Terry Barnard 
Manager, Community Development Lending 
303-297-4866 

David Foust 
Commercial Loan Officer III  
303-297-4865  

[email protected]

If you have questions, contact CHFA Community Development at [email protected].

The wood framing of a multifamily building under construction.

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