Developers Seeking Financing – Types of Loans
Commercial Loan Programs
Types of Loans
CHIFâ€™s Neighborhood Rebuilder Loan Program provides several types of loans to support new construction or rehabilitation of residential units in neighborhoods throughout Connecticut. The types of loans are:
Summary of CHIFâ€™s Loan Products rates and terms
Neighborhood Rebuilder Construction Loans
CHIFâ€™s Neighborhood Rebuilder Program offers developers short term construction loans. The rate is 6.5% for 12 months*.
In addition, CHIFâ€™s Neighborhood Rebuilder Program may provide a source of subsidies for development to pay for the “appraisal gap” that exists between the total development cost and the after-rehabilitated appraised value of the property. After rehabilitating the unit, the new homebuyer obtains a permanent mortgage based on the appraised value of the completed property, and assumes the appraisal gap (the second mortgage) subsidy from the developer. This “silent,” or “soft” second mortgage is forgiven after a short term, usually five to ten years.
Neighborhood Rebuilder Predevelopment Loans
CHIF provides loans of up to $100,000 to developers to pay for costs associated with the preliminary planning and design of affordable housing. Loans are provided at 1%-3% for 12 months* for new construction and rehabilitation projects. This special revolving loan program is funded with grants from the Melville Charitable Trust and the Connecticut Housing Finance Authority (CHFA).
Neighborhood Rebuilder Interim Bridge Loans
CHIF provides bridge loans to developers for interim financing. Loans are provided at 3% to 6.5% for up to 12months*.
Neighborhood Rebuilder Permanent Loans
CHIF sets rates and reviews requests for permanent affordable housing project loans as funds are available.
* Terms and rates are subject to change