SMART provides $3-$6 million in permanent insured financing, featuring up to 40-year fixed rates and one of the lowest FHA mortgage insurance premiums in the industry.

Whether you have a Housing Credit or non-Housing Credit project, CHFA delivers quickly with a flexible solution tailored to your needs.

Eligible Projects

  • 4 percent and 9 percent Housing Credit 
  • Non-Housing Credit

Eligible Uses

  • Acquisition
  • New construction
  • Rehabilitation

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Frequently Asked Questions

The HFA/HUD 542(c) Risk Sharing program is an FHA mortgage insurance tool used by CHFA and other housing finance agencies to provide credit enhancement to mortgages of multifamily affordable housing projects. CHFA originates, underwrites, processes, and services the loans to projects that include new construction, substantial rehabilitation, and refinance. CHFA and HUD share 50/50 in the risk of loss of the mortgage in the event of an insurance claim. The Risk Share credit enhancement provides full FHA mortgage insurance to allow CHFA to borrow at more favorable rates in the capital markets. 

​Under the Risk Sharing program, CHFA serves as the originator, underwriter, processor, and servicer of the Risk Share loan. Because CHFA is the underwriter in lieu of HUD, the process and time to obtain a HUD firm approval for the FHA insurance is significantly streamlined. HUD still requires a NEPA environmental review, completion of the 2530 process, and the Affirmative Fair Housing Marketing Plan, and CHFA reviews the loan due diligence items to underwrite the loan. Typically, a SMART loan takes 90 to 120 days from receipt of a complete loan application to construction loan closing.  

No. This is true only if Risk Share is used during the construction phase. Since SMART involves a Risk Share permanent loan, Davis Bacon is not required.

Any HUD program participant or use of HUD grantee purchases and all properties intended to be developed with HUD assistance must have an environmental review to ensure the proposed project does not negatively impact the surrounding environment and the property site itself is safe for development. Therefore, every project must comply with the NEPA and other related federal and state environmental laws.

The assessment can take anywhere from 90-180 days depending on comment requirements and other factors related to the assessment. The sponsor starts the process by engaging an environmental professional with experience in conducting NEPA assessments. Once the assessment is completed, CHFA serves as the responsible entity (lender) and reviews the environmental assessment for completeness as part of the underwriting process. CHFA then forwards the assessment to HUD for final clearance.

The loan will fund after construction is complete and the project has achieved stabilization. Stabilization is defined as 90 consecutive days of 93 percent occupancy, 1.15 debt service coverage, and rents at the underwritten amounts.

The 2 percent rate lock fee (non-refundable) is due when the loan commitment is returned to CHFA and accepted.

CHFA requires an operating reserve sized to six months of underwritten operating expenses and debt service. Replacement reserve deposits and tax/insurance escrows are required once the project converts to the permanent period. For new construction projects, the minimum replacement reserve deposit is $250 per unit per year for senior properties, $300 per unit per year for family properties, and $350 per unit per year for permanent supportive housing properties. For acquisition/rehab properties, the corresponding reserves minimums would be increased by $50 per unit per year.

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