Multifamily Finance

The Concessionary Debt Multifamily Finance program provides debt financing to eligible for-profit and nonprofit entities, local governments including housing authorities, and tribal governments for the creation of affordable housing. The program requires that the housing supported serves an average of 60% Area Median Income (AMI) or below unless the debt is subordinate (see chart below or guidelines for more details).

Please note: Shovel-ready projects that result in the construction of new units will be prioritized during the first year of program funding.

09-13-2023

Program Benefits	• Below-market interest rates • Flexible repayment terms • Senior debt or subordinate financing available
Eligible Borrowers	• For-profits   • Nonprofits   • Governmental entities, including housing authorities  • Tribal governments
Eligible Projects	• Low- and middle-income multifamily affordable rental developments  • Preservation of existing developments at risk of losing affordability
Program Allocation	15% to 35% of Affordable Housing Financing Fund (AHFF) allocation
Area Median Incomes (AMIs) Served	• 60% average AMI for all restricted units comprising the project • If debt is subordinate, the senior debt AMI requirements may be operative instead, provided those requirements demonstrate alignment to the debt program’s intent to support low- and middle-income multifamily rental housing. • Up to 25% of the development’s units may be unrestricted but would be excluded from eligible project financing • Rural resort communities may petition the Colorado Division of Housing to use more flexible income requirements.
Program Limits	Maximum loan size limited to the lesser of 90% of value or cost when considering all must-pay debt, debt service coverage ratio of 1.15 as a senior loan and 1.05 as a subordinate loan when combined with the senior debt, or $6,000,000, whichever is less. The maximum loan limit may be reduced based on funding availability.
Minimum Debt Financing	$400,000
Use of Proceeds	Eligible project costs include acquisition, construction hard costs, professional fees, financing costs, soft costs, and reserves.
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	All 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

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 Multifamily 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.