Recent Interest Rates*
|Construction Loan Type||Rate|
|2 Years (Tax Exempt)||4.220%|
|Permanent Loan Type||Rate|
|30/30 (Tax Exempt)||4.910%|
|40/40 (Tax Exempt)||5.410%|
* As of 2/22/2017
* Rates are indications only, are subject to change, and must be verified at the time of rate lock. Above rates assume cost of issuance is paid at closing. See Program Parameters & Fees for more information. Rates are provided solely as a convenience and CHFA assumes no liability for any error resulting from its use.
What are my financing options with CHFA?
CHFA can provide financing for the production and
preservation of affordable housing in multiple ways. CHFA
provides both taxable and tax-exempt bond financing for
short-term construction loans and long-term permanent
loans. Most commonly, CHFA serves as both the construction
and permanent lender in conjunction with a variety of
federal and state housing programs. With CHFA financing,
the project pays interest based on the type of loan. The
interest rate on the loan is inclusive of servicing and
How are bond issuance costs paid when financing with
Costs of bond issuance can be paid as a flat fee itemized
in the development budget or financed with a small mark-up
on the loan interest rate.
The flat fee option for construction-only financing,
permanent-only financing, or construction/permanent
financing would be 1.5% of the total
loan amount paid at initial closing.
To finance the cost of bond issuance, CHFA would add
0.25% to the permanent financing rate for both
construction/permanent financing and permanent-only
financing. For construction-only financing, the interest
rate charge would be 0.75% added to the published
construction interest rate.
How is CHFA’s financing structured?
Construction-only financing will be structured so that
the construction financing will mature at the end of the
construction period. At maturity, it is anticipated that
the construction loan will be retired with the proceeds of
permanent financing and/or the proceeds resulting from the
sale of low-income housing tax credits, historic tax
credits, state historic tax credits or housing tax credit
For CHFA’s construction/permanent option, the financing
will be structured with two notes: a construction note and a
permanent note. Each note will have its own rate, amount
and term. Starting at initial closing and through the
duration of the construction period, the notes will accrue
interest based on the construction note rate and the
Permanent note rate with no principal amortization.
Interest will be due and payable on a monthly basis and may
be capitalized in the development budget.
Upon final closing at the end of the construction period,
the construction note matures and is retired with other
development financing or with the proceeds from the sale of
tax credits (e.g. LIHTC, Federal/State Historic credit,
HTCC, etc.). At this time, the permanent loan starts
amortizing at the rate and term specified in the note.
Example: A development with the need
of $10,000,000 in construction financing and an anticipated
permanent loan amount of $4,000,000 will be structured as
Construction Note: $6,000,000
Construction Rate: 4%
Construction Term: 2 years (Interest Only)
Permanent Note: $4,000,000
Permanent Rate: 5% (Interest Only for 2 years)
For the first 24 months, interest accrues @ 4% x the
unpaid construction note principal balance AND @ 5% x the
unpaid Permanent note principal balance. On month 24, the
construction note matures ($6,000,000 was deposited and used
to pay down principal. Beginning month 25, the Permanent
note of principal and interest begins at the specified rate
For permanent-only financing, CHFA will forward commit
the rate and loan for 24 months. If the loan is not
utilized by month 24, the borrower will be required to pay
an extension fee.
For construction costs, am I able to draw the
construction loan first and then utilize the permanent loan?
No. All disbursements will be made on a “pari passu”
basis. In the example above, a $1,000,000 draw request
would be funded 60% from the construction loan note and 40%
from the permanent loan note.
How are the loan origination fees and costs of bond
issuance calculated on the two-note structure?
The loan origination fee and the flat fee for costs of
bond issuance will be calculated on the combined loan amount
and paid at initial closing. If the cost of bond issuance
is financed, the interest rate add-on will be assessed on
both the construction and permanent interest rates.
If I haven’t received my tax credit equity in month 24
at the construction loan maturity to retire the construction
note, are we able to extend the loan?
At the end of the 24 month period, the permanent loan
will be fully drawn and commence amortization. If the
construction is not retired, it may be extended by CHFA.
With this extension, CHFA may elect to assess a $5,000 per
month fee until the final closing occurs.
How does the new rate-lock
CHFA will commit to a maximum
interest rate, or a "not-to-exceed"
rate, once the Board of Directors
adopts the Loan Resolution. This
"not-to-exceed" rate will be 0.50%
higher than the prevailing permanent
interest rate on the day the
Resolution is adopted. For example,
if the prevailing permanent interest
rate at the time the Resolution is
adopted is 5.00%, the ultimate
permanent rate will not be any
higher than 5.50%. The
"not-to-exceed" rate will remain in
place for as long as the Loan
Resolution is valid, up to nine
months after adoption. The
permanent interest rate will be set
30 days prior to the Initial
The Initial Closing date will only be set once CHFA has
received sufficient documentation to demonstrate that a
Closing can occur within 30 days.
What happens if the borrower
cannot reach Initial Closing within
30 days of locking the permanent
If the Initial Closing does not
occur within 30 days of locking in
the permanent rate, the borrower
will be charged an "Initial Closing
Extension" fee equivalent to 0.25%
of the Loan Amount. If the borrower
cannot reach Initial Closing within
60 days of locking in the rate, the
borrower will be charged a “Rate
Reset" fee equivalent to 0.25% of
the Loan Amount, and the permanent
interest rate will be reset based on
the prevailing market rate at the
time of the reset. The
"not-to-exceed" rate will be
adjusted to the new reset rate.
Does the Loan Resolution expire? If so, when?
The Loan Resolution will expire
on the last business day of the
ninth month following the Loan
Resolution adoption. For example,
if a Loan Resolution is adopted on
January 29th, 2015, the Resolution
will expire on October 30th, 2015.
If the Initial Closing does not occur on or before the
last business day of the ninth month following Resolution
adoption, the borrower will be subject to a “Resolution
Extension" fee equivalent to 0.25% of the Loan Amount. The
Resolution can be extended one time for up to six (6)
months. Initial Closing Extension fees and Rate Reset fees
will apply during the Resolution Extension period.
If the Initial Closing still does not occur within the
Resolution Extension period, the application may be
cancelled and voided and the applicant may be required to
submit a new application and pay new fees.
Consideration for extension of the Initial Closing
deadline is contingent upon the borrower having satisfied
requirements of submission for approval by the State Bond
Commission, as applicable. CHFA reserves the right to waive
any program fees resulting from delays beyond the borrower’s
The following documents are related to Multifamily Interest Rates
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