At CHFA, it is our mission to increase the supply, availability and retention of affordable housing for individuals and families in Connecticut. Whether you’re looking to construct a new development or rehabilitate an existing property, CHFA can finance your affordable housing development.
With competitive rates and loan terms of up to 40 years, CHFA offers long- term, fixed-rate financing to provide owners and investors with the financial sustainability their developments need.
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Eligible developments must:
CHFA financing options include:
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 tax credits (e.g., Low-Income Housing Tax Credits (LIHTCs), Federal/State Historic Credits or Housing Tax Credit Contributions (HTCCs)), or other development financing.
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 resulting from the sale of tax credits (e.g., LIHTCs, Federal/State Historic Credits or HTCCs), or other development financing. 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 follows:
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)
Loan proceeds will be drawn proportionately from both the construction loan and the permanent loan. For the first 24 months, the monthly interest due will be calculated based upon the Construction note principal balance at 4% AND permanent note principal balance at 5%. On month 24, the construction note matures; $6,000,000 is deposited for the principal pay down; and the Construction loan is retired.
Beginning in month 25, the permanent note of principal and interest begins at the specified rate and term.
For additional information regarding the two-note structuring of CHFA’s construction/permanent loans, please click here.
CHFA offers permanent-only financing for developments financed in concert with an alternative construction lender. CHFA’s permanent financing provides long-term, fixed-rate certainty for development financing.
In addition to evidence that the work scope, design and specifications meet CHFA guidelines, this permanent-only financing will require: (1) a commitment/usage fee for CHFA to secure a 24-month forward commitment of the permanent loan rate; and (2) CHFA’s participation in the construction oversight during the construction period.
If the loan is not utilized by month 24, the borrower will be required to pay a commitment extension fee.
Tax-exempt, taxable and special financing
CHFA's financing of construction and permanent loans is primarily offered with the proceeds from the sale of tax-exempt and taxable bonds. Occasionally, special financing is offered by CHFA utilizing alternative sources of funding. Each source has its own specific requirements. Please consult with CHFA staff to determine which source(s) may be best for your transaction.
Subject to availability, tax-exempt bond financing is subject to volume cap availability and is used for transactions with a minimum of 20% units affordable at 50% of Area Median Income (AMI) and which are seeking to use 4% LIHTCs. Applications are generally received in conjunction with requests for competitive resources from the Connecticut Department of Housing (DOH) or other published notices. Due to the limited nature of Connecticut’s tax-exempt bond authority, applications for tax-exempt bond financing 1) may be subject to a competitive process to secure a bond allocation; and 2) will not be accepted without the use of LIHTCs.
Applicants are advised to check all published notices and/or contact CHFA Multifamily for current details.
For current tax-exempt bond rates and rate lock information, please click here.
Taxable bond financing may be offered by CHFA for use with 9% LIHTCs or for non-LIHTC developments meeting CHFA’s affordability requirements. Financing applications not coupled with competitive CHFA or DOH resources may be submitted at any time. Please contact CHFA staff for a pre-application conference to discuss your financing needs.
For current taxable bond rates and rate lock information, please click here.
Occasionally, CHFA offers special financing available from the refinancing of federal funds or through CHFA’s Investment Trust Account (ITA). These funds may be made available to developments with previously approved financing or by a funding announcement posted here.
For specific terms and fees associated with CHFA financing, please click here.
For more information, contact Joe Voccio at (860) 571-3527 or Joe.Voccio@chfa.org.
How to Apply
Once you have established a qualified development team, complete and submit the CHFA/DOH Consolidated Application. Final approval is granted by CHFA’s Board of Directors.