Google
 

Home | Download | Purchase | knowledge

 
 
Predevelopment Loan Program
Summary
?/DIV>
Authorized under Connecticut General Statutes Section 8-410, this program allows DECD to contract with eligible developers for state financial assistance in the form of interest-free loans for predevelopment costs associated with constructing, rehabilitating or renovating affordable housing for low and moderate-income households.

Eligible applicants
  • non-profit corporations
  • housing authorities
  • municipal developers
  • limited partnerships, partnerships, joint ventures where at least one member is one of the above
?/DIV>
Eligible activities
?/DIV>
DECD may extend loans for project specific predevelopment costs such as:
  • land purchase options
  • feasibility studies
  • planning and design costs
  • required insurance
  • legal and financial expenses
  • costs of permits and approvals
  • appraisals
Other preliminary project costs as approved by the Commissioner.

Amounts and Terms
 
Loan amounts are limited to $250,000 per project.?The Commissioner must approve requests for loans exceeding $250,000.?Loans are provided at 0% interest with repayment due upon permanent financing. The term of the loan varies with the project but averages 18 to 24 months. In the case of homeownership projects, the loans may be pro-rated and repaid upon sale of individual units to low and moderate-income buyers.?For projects approved for financing at the State Bond Commission, loan repayment can occur by internal DECD transfer of funds from the project development account.
 
Conditions
 
The Predevelopment Costs Program statute contains a special provision allowing forgiveness of the loan obligation in the event that permanent financing cannot be obtained, subject to the developer€™s good faith efforts to secure permanent financing. An additional condition of forgiveness is agreement by the developer that any studies, reports, appraisals or other documents supported by DECD€™s predevelopment funds are proprietary to DECD at the sole discretion of the Commissioner.