The Capital Improvement and Preservation Fund is a state bond funded program that seeks to:
- Preserve and improve existing privately owned, state or federally assisted affordable rental developments.
- Eligible properties include housing at risk of losing affordability restrictions due to the potential for the prepayment of its mortgage or housing in which a project-based rental assistance contract has expired.
For-profit and non-profit developers and local housing authorities are eligible to apply for CIPF funds.
Eligible Activities and Affordability Requirements
CIPF funds can be used for:
- the acquisition, refinance and/or rehabilitation of existing rental property.
- At least half of the total units in the project must be occupied and affordable to households at or below 80% of area median income, using U.S. Dept. of HUD data.
- In addition, no less than 5% of the total units must be available and affordable to households at or below 50% of area median income as determined by HUD.
- These rental and occupancy restrictions will be in place for a minimum term of 40 years from the date of the closing on the CIP funds.
- DHCD will award $40,000 per unit for projects with more than 25 units with a per project maximum of $2,000,000.
- DHCD will award $50,000 per unit for projects with 25 units or less with a per project maximum of $1,250,000.
- CIPF monies are structured as a 40-year deferred payment loan at 0% interest.
- DHCD reserves the right to structure the loan with an interest rate acceptable to DHCD set at the time of closing.
- All CIPF loans are non-recourse and secured by a mortgage on the property.
- demonstrated risk of prepayment resulting in significant loss of affordable units
- appropriate scope of rehabilitation or construction
- appropriate total development cost for properties included in proposal
- financial viability of the project
- degree of local support, including local funding commitments
- evidence of readiness to proceed
- incorporation of sustainable development principles