Carryover Loan Program
For developers who intend to place a project having a reservation of tax credits with a CAHEC-sponsored equity fund, the Carryover Loan Program is a tool designed to assist with paying the costs needed to meet the 10% test requirements for a carryover allocation. The Carryover Loan Program is intended to be a short-term bridge loan until the construction loan and tax credit equity are closed. As such, carryover loans will be limited to $750,000, including interest and fees, and these loans will have an initial term up to six months.
Bridge Loan Program
The Bridge Loan Program provides greater financing flexibility during periods of the development process that are typically undercapitalized. The Bridge Loan Program allows developers to make progress on projects before tax credit equity is closed and can also be used side-by-side with a construction-to-permanent mortgage loan when subordinate debt is needed. Bridge loans will be originated up to $1,500,000, including interest and fees, and these loans will have an initial term up to eighteen months.
Predevelopment Loan Program
Predevelopment loans are intended to provide a source of funds for nonprofit entities to pay for expenses related to planning tax credit-eligible developments for which CAHEC-sponsored equity funds would have an interest in providing investment capital. Examples of typical qualifying predevelopment expenses include market studies, consulting fees, preliminary architectural plans, site control, appraisals, surveys, soil tests, environmental assessments, legal fees, and application fees.
A nonprofit entity may borrow up to $100,000 including interest and fees, with a limit of $50,000 per application. If a CAHEC-sponsored equity fund invests in the development, CAHEC will forgive all accrued and unpaid interest and the loan origination fee.
To learn more about these loan programs, please contact Larry Poole at (919) 645-9811 or moc.c1503060392ehac@1503060392eloop1503060392l1503060392.