Equity

The Equity program provides below-market-rate equity investments to eligible for-profit and nonprofit entities for the construction or preservation of low- and middle-income multifamily rental developments. A Tenant Equity Vehicle (TEV), funded through Proposition 123 program earnings, will be established by OEDIT, CHFA, and a third-party administrator to benefit the residents of developments that receive Equity financing.

Program Benefits	• Flexible source of capital with below-market return expectations • Structured with equity returns based on available cash flow
Eligible Borrowers	• For-profits • Nonprofits • Governmental entities including housing authorities • Tribal governments
Eligible Projects	• Low-income multifamily affordable rental developments • Middle-income multifamily affordable rental developments • Preservation of existing developments at risk of losing affordability This equity cannot be paired with federal or state Housing Tax Credit equity
Program Allocation	40% to 70% of Affordable Housing Financing Fund (AHFF) allocation
Area Median Incomes (AMIs) Served	Not to exceed 90% average AMI for all restricted units
Maximum Investment	The maximum Program Investment amount is $15,000,000. Investment size will be based on a comprehensive evaluation of the project’s financials, supporting documentation, and available program funding.
Minimum Investment	$1,500,000
Investment Returns	Below-market returns based on available annual cash flow, with any remaining capital paid in full or in part at a capital event. The Program Investment term is up to 30 years.
Eligible Uses	Eligible project costs include acquisition, construction hard costs, professional fees, financing costs, soft costs, and reserves.
Fees	• 1% investment placement fee • Standard placement costs
Collateral	The Program Investment will be secured by the project assets.
Affordability Requirements	A Regulatory Agreement ensuring affordability for 30 years will be required, which must include a two-year notice to local government.
Priorities	• High-density housing • Mixed-income housing • Environmental sustainability
Strategic Investment Round Criteria (August 2-August 9, 2024)	• Developments that need to close prior to December 31, 2024 • Applications that demonstrate unique and extraordinary state and/or regional economic benefit • Applications supporting developments that will leverage other statewide investment

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 programs are subject to change.

Equity Process and Timeline

The application period for the Equity program is currently closed.

From Friday, August 2nd, through 5:00pm MT on August 9th, applications and available supporting materials for the Proposition 123 Equity program were accepted for a Strategic Investment Round to support applications meeting the Equity program guidelines as well as the following criteria:

• Developments that need to close prior to December 31, 2024
• Applications that demonstrate unique and extraordinary state and/or regional economic benefit
• Applications supporting developments that will leverage other statewide investment

A total of 15 applications were received representing $98.6 million in funding requests. CHFA will announce project sponsors selected to receive Equity funds during the Strategic Investment Round later this month.

The Strategic Investment Round will allocate up to $20 million in available funding to support developments meeting the criteria described above. CHFA will announce project sponsors selected to receive Equity funds during the Strategic Investment Round in September 2024. There will be additional opportunities to apply for Equity program funding in late 2024 or early 2025.

Strategic Investment Round Application and Award Timeline:

August 2, 2024	CHFA began accepting applications.
August 9, 2024	Application submission period closed at 5:00pm MT.
September 2024	CHFA will announce project sponsors selected to receive Equity funds during the Strategic Investment Round.

CHFA accepted applications for the Equity program from March 18, 2024 through April 18, 2024. CHFA received 36 applications representing more than $313M in funding requests (PDF). After careful review, CHFA and OEDIT have preliminarily approved funding for six projects totaling $39.3 million (PDF). Final details will be determined during the full underwriting process.

Please sign up for the Proposition 123 Affordable Housing Financing Fund eNews for future updates on the Equity program. Questions about the Equity program may be submitted to [email protected].