Land Banking

The Land Banking program provides grants to eligible local or tribal governments and forgivable loans to eligible nonprofits with a demonstrated history of providing affordable housing. These funds must be used to acquire and preserve land for affordable for-sale housing or affordable rental housing. Mixed use may be allowed so long as the predominate use is affordable housing.

Eligible Projects	• Acquisition of land for the development of affordable rental and for-sale housing. Mixed use is allowed if the predominate use is affordable housing  • New money transactions will be prioritized over a refinance or addressing financing gaps on existing projects
Program Benefits	• Grants to eligible local and tribal governments • Forgivable loans to eligible nonprofits • Good faith efforts may be used for consideration of extensions
Program Allocation	Program funding is 15%-25% of total Financing Fund allocation
Maximum Amount	Lesser of $5 million or appraised value
Forgivable Loan Terms	• Proper zoning and development plan within 5 years • Permitted and funded within 10 years
Forgivable Loan Conditions	• If specified milestones are not achieved by 5 and 10 years, the forgivable loan plus interest must be repaid within 6 months unless the land is conveyed to a state agency or other entity for the development of affordable housing with the approval of CHFA  • Non-performance could impact future awards • Upon repayment of the loan plus deferred interest, the property may be developed for any purpose
Grant Conditions	If specified milestones are not achieved by 5 and 10 years, the grant must be repaid within 6 months
Interest Rates and Fees	• Forgivable loans bear a deferred interest rate of 2%. No interest is due if milestones are achieved • Standard loan and grant closing costs apply • Environmental Report required for transactions over $750,000
Area Median Incomes (AMIs) Served	• Rental: households with an annual income at or below 60% AMI • Homeownership: households with an annual income at or below 100% AMI • Rural Resort communities may petition the Colorado Division of Housing to use more flexible income requirements • Commercial or mixed-use development, including non-restricted housing, is eligible provided that the predominant use (70%) is affordable. Projects proposing between 51% and 69% of the project to be utilized as affordable may apply with justification
Geographic Distribution	Letters of Intent and/or applications will be reviewed to ensure equitable distribution of funds statewide to both rural and metro areas
Reporting	Loan and grant recipients will annually report on development progress.
Funding Process and Distribution	• Letters of Intent will be required prior to submission of an application • Based on anticipated demand, applications may be reviewed through a competitive funding round
Affordability Covenants	• All projects must have a Regulatory Agreement at the time of program funding which will cover the milestone period • Final development must include a covenant maintaining affordability of rental housing units for at least 30 years after the final improvements are developed • Homeownership developments shall remain affordable for at least 30 years through a ground lease or similar structure  • Projects may request a waiver to 20 years with a market analysis
Priorities	• High-density housing • Mixed-income housing • Environmental sustainability • Shovel-ready projects that result in new units • Use of modular/off-site construction if cost competitive • Inclusion of home-based child care units or commercial child care facilities
Commitments	Commitments will be valid for 60 days

This chart is intended only to highlight certain program requirements. Loans and grants 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. More details can be found in the Land Banking Program Guidelines (PDF).

The Letter of Intent (LOI) acceptance period for the Land Banking program is currently closed.

CHFA began accepting LOIs for the Land Banking program on September 16, 2024. As of September 25, 2024, 38 LOIs had been received representing over $94 million in funding requests.

Given the high demand and funding available for the 2024-2025 fiscal year, the LOI acceptance period for the Land Banking program closed on October 1, 2024, at 11:59pm MT.

Prospective applicants whose LOIs are approved will be invited to complete a full application and will have 60 days to complete it. Once an application is approved, CHFA will provide the applicant with a loan commitment, along with a list of any due diligence items to be collected.  The commitment will be valid for 60 days and must be signed and returned to CHFA prior to the expiration of the commitment.

In addition to the priorities of high-density housing, mixed-income housing, and environmental sustainability established by the statute, fiscal year 2024-2025 Land Banking strategic policy priorities include shovel-ready projects that result in new units. This includes a priority for applicants demonstrating readiness to proceed, including a Purchase and Sale Agreement or an Option to Buy. Projects should be ready to start construction within 12 months of application.

A total of $48 million will be available to support the Land Banking program during this funding round. Of that total, $12 million (25%) of the program allocation will be reserved for Land Banking projects within a Transit Area or Walkshed designated on the Department of Local Affairs (DOLA) map to be published September 30, 2024. The intent of this set-aside is to incentivize and align developers with HB24-1313 land use priorities and secure land in Transit Areas.

Please refer to the Land Banking Program Guidelines for more details.

September 9, 2024	LOI forms will be available on the Affordable Housing Financing Fund website.
September 16, 2024	LOIs will be accepted.
October 1, 2024	LOI acceptance period will end at 11:59pm MT.