CMF provides up to $750,000 of flexible gap financing for the preservation or construction of 4 percent or 9 percent Housing Tax Credit projects located in eligible areas and serving incomes at or below 50 percent of Area Median Income.
Program Funds Committed
CHFA will be applying to the US Department of Treasury to seek additional CMF funds for future deployment. Please stay tuned for program updates.
The program’s impact includes:
Eligible Projects
- 4 percent or 9 percent Housing Tax Credit
- Serving incomes at or below 50 percent AMI
- In areas of economic distress
Eligble Uses
CMF can be used for new or existing project acquisition and rehabilitation as a:
- First mortgage
- Secondary gap financing
- Third mortgage
Frequently Asked Questions
The Capital Magnet Program is administered and awarded by The CDFI Fund (CDFI), which is part of the U.S. Treasury Department. CHFA has received multiple-year awards through a competitive process and the funds are utilized for affordable multifamily housing.
The loan program requires must-pay monthly principal and interest payments. As such, the project must demonstrate ability to repay the debt in addition to all senior loans.
Loans are normally funded at the time of conversion to permanent debt upon meeting all closing requirements.
The Capital Magnet Fund program provides up to $750,000 of gap financing for the preservation or construction of projects that receive a reservation of 4 percent or 9 percent Housing Credits. Additionally, up to 20 percent of the loan amount can be structured in the form of a grant to a nonprofit when CHFA is the senior lender on the project.
No, we can provide a second mortgage behind another lender's senior loan.
The preference is the funds be utilized for projects with at least half of the units serving households at or below 50% AMI and those properties located in areas of economic distress as defined by The CDFI Fund (CDFI), and/or located in rural areas. However, CHFA must balance the projects awarded to ensure additional threshold requirements are being met.
Generally, no, although CHFA would consider this on a case-by-case basis.
Yes, when the CMF program is used as a first mortgage or senior debt. If used as a secondary or tertiary debt, reserve requirements are not in place. 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.