Providing gap financing for the development and preservation of income-restricted housing throughout Denver. Financing at favorable, below-market terms is available for both rental projects serving households earning to 80% AMI, and for-sale projects serving households earning up to 100% AMI.
Financing is also available for land acquisition for affordable housing development, and to support income-restricted units in mixed-income (partially market-rate) projects.
HOST is launching a new competitive award process for rental development projects seeking gap financing from the City and County of Denver. The decision to initiate competitive awards was based on the need to improve alignment of limited funding dollars with priorities established through Housing an Inclusive Denver. Furthermore, competitive awards are identified in our annual action plan as a method to more effectively compare projects in a given year.
Our new competitive award process will be administered through an annual Competitive Application for all projects applying for 2020 4% + State tax credits, 2020 4%, 2020 non-tax credit projects, and rental housing projects going forward.
Through the new process, rental-housing projects, including new construction and preservation, will be prospectively underwritten and receive conditional commitment for gap financing in advance of tax credit application to the Colorado Housing and Finance Authority (CHFA). The Competitive Application will include separate competitive application rounds for projects seeking 4% + State tax credits, 4% tax credits, 9% tax credits, as well as non-tax credit projects. The Competitive Application will detail available funding amounts, as well as application scoring criteria. A final timeline will be compiled and distributed following a stakeholder meetings.
Proposed 2020 Timeline is:
Starting December 23, 2019, no new applications for rental housing development—with the exception of 2020 9% projects—will be accepted outside of the competitive award process.
The new competitive award process will replace HOST’s current term sheets. HOST will continue to utilize its term sheets in reviewing 9% tax credit projects in 2020 and will use underwriting criteria to guide individual project analysis for funding gaps for all Competitive Applications moving forward. The new process applies only to rental development, and gap financing applications for homeownership projects will continue to be accepted on a rolling basis.
Gap financing for the development and preservation of income-restricted housing is invested through a set of Affordable Housing Financing Products (financing is also available under competitive RFPs for specific projects).
Each financing product is designed to be responsive to gaps in market financing available for different types of affordable housing projects. Applications for gap financing must specify which financing product the project is applying for.
The city prioritizes investment in projects that meet key affordable housing policy priorities. These priorities relate to both the location of the proposed project as well as characteristics of the project itself.
Our housing loan application requires applicants to respond to questions about how the proposed project meets specific city priorities. Prior to being accepted for underwriting, applications for city financing will be evaluated according to how well they meet the following priorities.
Location-specific priorities include:
Project-specific qualifications include:
Projects applying for city financing must also meet minimum readiness to proceed criteria, including:
Once an application is accepted by the city, all requests for financing are subject to underwriting, and approval by the Loan Review Committee and City Council where applicable.
2019 Price Sheet (Limits on Income, Rent Prices, and Sale Prices)
Financing Products FAQ – Questions and answers on how the city invests through its financing products
Form of Subordination – Your senior lender may request that junior lenders, including the city, sign a Subordination Agreement expressly subordinating junior liens and payment priority
To apply for gap financing for affordable home ownership projects, contact Jennifer Siegel, email@example.com, 720-913-1667.
We recommend that you plan for a minimum three-month turnaround time from the acceptance of your application until financial closing. This timeline assumes no significant negotiation of any documents (including a subordination agreement), minimum environmental review requirements, and a minimum City Council review period.
There are a number of factors that may extend the process, many of which are outside of our control and/or under the control of the borrower.