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 (PDF) for more information.

Concessionary Debt Process and Timeline

The application period is currently closed. Applications were accepted for the Multifamily Finance, LIHTC Gap Finance, and LIHTC Predevelopment Finance loan options from May 27, 2026, through June 10, 2026. This was the second of two application rounds held in Fiscal Year 2025-2026. During this round, a total of 17 applications were received, representing more than $38 million in funding requests (PDF). Applications were carefully evaluated by CHFA and OEDIT against priorities established by the statute and additional strategic policy priorities outlined in the Affordable Housing Financing Fund Fiscal Year 2026 Funding Plan (PDF). Eleven projects representing $25 million have been selected to move forward to full underwriting (PDF).

Please sign up for the Proposition 123 Affordable Housing Financing Fund eNews for future updates on the Concessionary Debt program. Questions about the Concessionary Debt program may be submitted to concessionarydebt@chfainfo.com.