accessory dwelling unit (adu) relending program

ADU Relending Program

• Eligible Lenders and Use of Funds
• Affordability Requirements
• Financing Terms
• Application Process

Eligible Lenders and Use of Funds

• Lenders must be a nonprofit lending organization, public housing authority, or CDFI.
• Lenders must be able to demonstrate the ability to self-monitor their program compliance, including the ability to verify the income of each eligible household.
• Eligible projects must be located in an ADU Supportive Jurisdiction. Information regarding the location of ADU Supportive Jurisdictions can be found on the Colorado Division of Local Government (DLG) website.

An ADU, as defined by C.R.S. 29-35-402, is an internal, attached, or detached dwelling unit that provides complete independent living facilities for one or more individuals, is located on the same lot as a proposed or existing primary residence, and includes facilities for living, sleeping, eating, cooking, and sanitation.

Affordability Requirements

• Each eligible ADU must be occupied by a low- or moderate-income household that is either a residential borrower earning no more than 140 percent of the statewide Area Median Income (AMI) or the residential borrower’s tenant whose household earns no more than 140 percent AMI of the applicable county.
• Lenders must income qualify the residential borrower, the potential ADU tenant, or both the residential borrower and the potential ADU tenant, based on program criteria.
• Lenders will be responsible for ensuring long-term income affordability on the property for the longer of 30 years or duration of the loan.

Financing Terms

• The maximum loan amount to lenders is $1,500,000.
• Loans can be fixed or revolving with a maximum maturity or interest-only period of 30 years.
• All loans will have an interest rate of 1.0 percent.
  • Lenders that provide evidence satisfactory to CHFA of matching funds at a 1:1 ratio will receive a discounted rate of 0.50 percent.
• Lenders will have nine months to make their first disbursement and must deploy all funds within 18 months.
• Quarterly reporting requirements apply. Please see complete program guidelines available upon request for details.

The above is intended only to highlight certain program requirements. Please email businessfinance@chfainfo.com to receive an application and complete program guidelines.