Predevelopment & Carryover Loans

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.

Nonprofits may borrow up to $50,000, plus interest and fees. If a CAHEC-sponsored equity fund invests in the development, CAHEC will forgive all accrued and unpaid interest and the loan origination fee.

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 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 will have an initial term of six months.

For more information about either loan program, contact Chuck Newcomer at (919) 788-1802 or cnewcomer@cahec.com.