Since 1989, HDF has financed affordable housing projects in the state of Connecticut through its Multifamily Loan Fund. This Multifamily Loan Fund is comprised of a consortium of twelve banks brought together to finance affordable housing projects throughout Connecticut. The fund has financed the creation or preservation of over 1,300 affordable housing units.
HDF-financed projects throughout the state of Connecticut revitalize neighborhoods and communities, deliver positive social impact, incorporate energy efficient design practices, and leverage additional subsidies from other federal, state, and local funding sources.
HDF Multifamily loan products include Predevelopment Loans (Loans with terms between one to two years), Acquisition Loans (Loan with terms up to two years), Construction Loans (Loans with terms up to twenty four months), Mini-Permanent (Loans with terms up to ten years), Permanent loans (Loans with terms up to thirty years), and Bridge loans for committed project subsidy sources (Loans with terms up to two years) which bridge public subsidy sources and low income housing tax credits.
Competitive interest rates are set prior to loan closing with amortization up to thirty years. Collateral is first lien mortgage on the residential or mixed use property.
Eligible Projects and Borrowers
HDF finances rehabilitation and new construction for both homeownership and rental purposes. Eligible projects include subsidized affordable housing, special needs and supportive housing, mixed income housing, and mixed-use projects with residential as the main use. Projects must meet certain criteria to be considered for financing which includes a loan to collateral value which does not exceed 90% and has sufficient cash flow to meet debt service at a ratio of at least 1.10 or better.
Eligible borrowers include experienced non-profit affordable housing developers, Housing Authorities, and private developers of all size. Developer/owner must have significant affordable housing development experience and financial capacity and must assemble a strong development team. Borrower’s financial condition, collateral, and ability to repay are important components in the underwriting process.
HDF defines affordable housing as one of the following:
(a) housing for which persons and families pay thirty percent (30%) or less of their annual income, where such income is less than or equal to eighty percent (80%) of the area median income for the municipality in which such housing is located, as determined by the United States Department of Housing and Urban Development;
(b) the lesser of (i) if applicable, housing which meets threshold requirements for low income occupancy and rental limits established pursuant to Section 42 of the Internal Revenue Code governing the Low Income Housing Tax Credit Program; and (ii) housing which does not exceed the rental limits established by Connecticut Department of Housing and Department of Economic and Community Development pursuant to their state funding programs.
Loan Commitments are decided within 6 weeks of HDF’s receipt of full project information, including:
- Borrower and Key Staff Resumes
- Three Years of Audited or Personal Financial Statements
- Project Narrative
- Market Study
- Evidence of Site Control
- Zoning Approvals
- Environmental Reports
- Operating Pro-Forma
- Development Budget
Multifamily Member Banks
Connecticut Community Bank
Darien Rowayton Bank
First County Bank
First Republic Bank
M & T Bank
Newtown Savings Bank
People’s United Bank
Savings Bank of Danbury
Union Savings Bank