HFA offers financing for both new construction of multifamily rental housing and for the preservation and rehabilitation of existing affordable multifamily rental housing. Tax-exempt, taxable and 501(c)(3) bond proceeds may be used to finance these developments.
New Development - To qualify for financing for new construction under the All Affordable Housing Program, all units must be affordable to households earning no more than 60% of the Area Median Income (AMI), adjusted for family size, in the county where the development will be located.
Preservation - Projects that were initially financed through federal and/or state affordable housing programs, as well as those not currently part of an affordable housing program, are eligible for the All Affordable Housing Program. To qualify, a majority of the units in a project must be affordable to households earning no more than 60% of the AMI for the county where the development is located. For tax-exempt bond financed projects, rehabilitation costs must not be less than 20% of the bond amount (if enhanced by SONYMA's Mortgage Insurance Fund). Other credit enhancers require varied percentages of rehabilitation.
Subsidy Loans - Developers who obtain new construction and preservation mortgages from HFA are also eligible for HFA's Second Mortgage "Subsidy Loans." These loans provide subordinate, low interest rate subsidy loans to projects that are receiving HFA financing and which require subsidy to maximize the number of affordable units and to reach lower income or special needs populations.
Click here for more information about HFA's Second Mortgage "Subsidy Loan."
Low Income Housing Tax Credits (LIHTC) - The tax-exempt bond financing generates 4% "as of right" Low Income Housing Tax Credits, which can either be syndicated to generate part of the required equity a borrower must contribute to the financing, or be utilized to offset the borrower's tax payments.
Subsidy financing, which may take the form of a subordinate loan or grant, may also be available from federal, state and local sources.
To qualify for Low Income Housing Tax Credits, household income cannot exceed 60% of the AMI, adjusted for family size. In addition, some government subsidy financing requires lower income limits of 50% AMI or less. All low income units will be subject to a HFA Regulatory Agreement.
Click here for more information about the Low Income Housing Tax Credit Program.
Credit Enhancement - All bonds or bond financed mortgages, including those financed under the All Affordable Housing Program, must be credit enhanced. Credit enhancement provides security for bondholders and ensures a higher rating on the bonds issued, which in turn produces a lower mortgage rate.
Click here for more information on credit enhancement options and term sheet.
Applications for financing under the All Affordable Program are accepted on a continuous basis. Click here for application forms.
For those seeking Homes for Working Families and State Low Income Housing Tax Credits in conjunction with Bond Financing:
Last updated: 06/19/12