Who are the eligible applicants?
- For-profit corporations, partnerships, or sole proprietors
- Private incorporated non-profits with IRS 501(c)(3) or similar designation
- Public non-profit agencies
How can the Construction Loan Program be used?
The Affordable Housing Services Program’s Construction Loan can be used for the following activities:
- Affordable unit construction
- Infrastructure improvements
- Professional services
- Cost of permitting
What are the loan amounts?
- Generally, the maximum loan amount is 10% of the cost per affordable unit. For conversion construction the cost
per unit will be based on a licensed contractor’s estimates of the required repairs to bring the building
up to code (this also includes service delivery and administrative costs in the estimates).
- If the project is a 4% low-income housing tax credit project, loan amounts can become a maximum 20% of the per
unit cost. For conversion construction, the cost per unit will be based on a licensed contractor’s
estimates of the required repairs to bring the building up to code (this also includes service delivery and
administrative costs in the estimates).
- Construction that is solely targeting households less than or equal to 30% AMI may request the maximum loan
amounts of 10% or 20% prescribed here.
What are the terms and interest rates?
- Units for sale have a term of 5 years or until the property is transferred or sold, whichever occurs first.
Fully amortizing at an interest rate of 2.00%
- Units for rent with standard terms and interest rates may request from the following standard terms and
interest rates:
- 7-year term, fully amortizing at an interest rate of 2.50%, annual principal and interest payment;
- 10-year term, fully amortizing at an interest rate of 2.75%, annual principal and interest payment;
- 15-year term, fully amortizing at an interest rate of 3.25%, annual principal and interest payment; or
- 20-year term, fully amortizing at an interest rate of 3.75%, annual principal and interest payment.
- Applicants providing units for rent may request the option of annual payments from cashflow with principal balloon, provided the applicant demonstrates the need for such terms for project viability at the time of
the application. Applicants may request from the following interest only payments with principal balloon:
- 7 year term, at an interest rate of 3.00%, annual interest payment and principal balloon;
- 10 year term, at an interest rate of 3.25%, annual interest payment and principal balloon;
- 15 year term, at an interest rate of 3.75%, annual interest payment and principal balloon; or
- 20 year term, at an interest rate of 4.25%, annual interest payment and principal balloon.
- Applicants providing units for rent have the option to finance interest-only payments from cashflow with
principal balloon under the following requirements: (1) is pursuing low-income housing tax credits and/or is a
project targeting households at less than or equal to 30% AMI; (2) indicates that such terms are desired at the
time of application; and (3) demonstrates a need for such terms for project viability. An applicant may request
the following interest only payments from cashflow with principal balloon:
- 20 year term, at an interest rate of 2.00%, annual interest payment from cashflow with principal
balloon.
Additional information
For additional information about Construction Loans in Buncombe County, refer to our Affordable Housing Services
Program Requirements and Guidelines here: