Transformational Housing Loan Fund Term Sheet FAQs
Revised and Effective January 17, 2024
Q 1. What are the required application materials?
A. Similar to DOH gap funding applications, the application material requirements can be found in the Development Application Instructions and the project-specific application material checklists. Please note the checklists may not be exhaustive depending on the specific nuances of a project. Additional application materials specific to the THLF fund include:
- Application Fee;
- Narrative explaining efforts made to obtain financing for loan funding from financial institutions. Attach any LOIs and award letters/denial letters from financial institutions and other funding sources;
- PDF checklist on which priority areas are being met, if any;
- As-built appraisal; and,
- Documentation that loan has been approved by voters, if the applicant is a District
Q 2. What is the difference between THLF and DOH’s existing gap funding program?
A. THLF funds are not strictly intended to be gap funds. There are additional allowable uses including construction loans, short term acquisition loans, low interest mini-perm or subordinate debt, etc that may be applied for. The application and contracting process will mirror that of DOH’s traditional gap funding programs.
Q 3. Does a Metropolitan District qualify as a “political subdivision”?
A. Yes. A Metropolitan District is an eligible applicant. However, please note that per SB 22-159, any loan approved to a district must be approved by voters of the district, or otherwise meet the requirements in Section 2(d) of the bill.
Q 4. Are the listed AMIs maximums or averages?
A. The listed AMIs are maximums.
Q 5. Do the AMI maximums apply to 100% of the units or a smaller (50%) percentage of the units?
A. The maximum AMIs listed apply to 100% of the units.
Q 6. Can exceptions be granted to the area median income levels?
A. Yes. Per SB 22-159, page 11, an applicant may request an exception to the area median income “based upon demonstrated unique economic and housing costs attributes in the local community in which the development, project, or program is located.” If an applicant seeks to project meets the above requirement to their Housing Development Specialist and Andrew Paredes, Director of the Office of Housing Finance and Sustainability (andrew.paredes@state.co.us) for further review.
Q 7. How is the application fee paid?
A. The application fee of $500 can be paid via mailed check. The check should be made out to the Colorado Division of Housing. The check should be mailed to:
Colorado Division of Housing Attn:
Laura Caine 1313 Sherman St., Room 320
Denver, CO 80203
The fee must accompany the application. The mailed check must be stamped for postage before or on the first of the month in which the application is submitted in order to be deemed complete. For example, a complete application submitted on July 31st with a check stamped for postage on August 1st can be reviewed for the August round of application review. The same application with a check stamped for postage on August 2nd will be reviewed with the next month’s round of review. The fee is non‐refundable.
Q 8. Can I submit an application for regular DOH gap funds to stack with a THLF award?
A. Yes.
Q 9. Are we required to use Davis Bacon (DB) wages or any other prevailing wages?
A. No, DB is not required as part of the THLF award. However, DB may be required/triggered by other funding sources.
Q 10. Can I request a reclassification of my county’s designation?
A. Yes, a reclassification must be based upon the unique economic and housing cost factors present in the county. Pursuant to subsection (6)(c)(I) of SB 22-159, a request for reclassification may be reviewed by the Division of Housing. If an applicant seeks to request a reclassification they should submit an emailed letter describing how their project meets the above requirement to their Housing Development Specialist and Andrew Paredes, Director of the Office of Housing Finance and Sustainability (andrew.paredes@state.co.us) for further review.
Q 11. Are predevelopment costs an eligible use of funds?
A. No.
Q 12. What funds can be used to repay the THLF loan? Can other grants be used to pay the loan back?
A. Any funding source can be used to repay the THLF loan- including but not limited to cash flow, grants, loan proceeds, private equity or philanthropic donations.
Q 13. The maximum combined loan to value requirement is 95%. What does this mean?
A. At least 5% of funds in the capital stack must come from an equity source including but not limited to owner equity or grant funding.
Q 14. The term sheet states I need to submit a LOI from a financial institution and award letters or letters outlining denial from other funding sources. What does this mean?
A. SB22-159 requires that, “in order for an eligible recipient to obtain loan funding directly from the division, an eligible recipient must follow procedures that shall be specified by the Division to document the amount of leveraged funds proposed or committed as part of a loan application and the amount of funding sought from other sources, including demonstrated efforts by the eligible recipient to obtain financing for loan funding from financial institutions”. Applicants are required to submit Term Sheets or LOIs from financial institutions highlighting the amount of debt they could take out on a project and the terms, as well as a detailed explanation as to why a loan from a non-State financial institution is not feasible for the project. Applicants must also include any letters of funding approval and/or denial from other funding sources they applied to.
Q 15. When are the application materials due?
A. Application materials are due in Neighborly on the first of every month. The application fee must be posted by the first date of the month in order for the application to be reviewed within that month’s application cycle.
Q 16. I submitted my THLF application under the old term sheet and FAQ document, prior to the documents being updated on July 11, 2023. What does this mean for my application and requirements?
A. If you did not mail in a check with your application because application guidance was unclear, DOH must receive mailed checks posted by August 1, 2023 in order for applications to continue being processed.
If your application specifically requested a cash flow loan, which is no longer listed as an option for loan repayment, DOH staff will underwrite the application and determine whether or not the proposal works with up to a 40 year amortization or interest only repayment first. If this is not feasible for the project, a cash flow loan may be considered.