Pre-Development Loans
Phase I Pre-Development Loans
Eligible Uses:
Costs associated with feasibility evaluation and preparing site-specific applications to public and private funders, such as site control costs, engineering and environmental studies, soils testing, design work, and legal fees.
Additional Requirements:
Eligible borrowers are nonprofits only. Eligible projects include emergency housing; transitional housing; rental, cooperative or homeownership housing; mixed-use projects; other real estate-based development projects which contribute to an articulated community development strategy.
Loan Size:
Up $150,000 in some cases, although normal loan size is $85,000. The maximum amount of Phase I Predevelopment funds lent to one borrower for multiple loans cannot exceed $170,000.
Terms and Conditions:
0% interest, varying loan terms up to 3 years, recourse to borrower.
Phase II Pre-Development Loans
Eligible Uses:
Site control extension payments, property holding costs, architecture
and engineering, consulting, legal, application and financing fees including interest reserve, permit fees and eligible costs for LIHTC carryover requirement, repayment of Phase I Loan.
Additional Requirements:
Loan approval subject to evidence that at least one significant source of permanent project funding is committed.
Loan Size:
Up to $2 million.
Terms and Conditions:
Up to 12 months (renewable), Interest-only payments, May be secured by lien on property and/or lien on other unencumbered assets; may subordinate, Recourse to borrower.
