Good sites for affordable housing sell quickly in this real estate market. To compete with private buyers, affordable housing nonprofits in our region need quick and easy access to acquisition funds to purchase land and/or buildings that could accommodate affordable housing. The Revolving Loan Program for Affordable Housing is part of FCH’s Place-based Investment portfolio. Adopted as one of our investment practices in 2024, FCH invests a portion of its invested funds in local opportunities that offer potential social impact. Known as impact investing or program-related investments, our place-based investments seek to improve community-level infrastructure in the 17-town region FCH serves.
Program Details
Through the Foundation for Community Health’s partnership with the Litchfield County Center for Housing Opportunity (LCCHO), FCH offers loans to affordable housing nonprofits serving northwest Litchfield County, Connecticut. Loans provided through the program serve as bridge financing until long-term or permanent funding is secured.
Each eligible housing nonprofit will work with LCCHO to determine whether potential properties for sale present the opportunity for financially viable affordable housing development. Loans will be approved based on various factors including the number of housing units, infrastructure needs, and whether the cost is reasonable based on the estimated per unit cost to construct or renovate homes.
FCH will provide up to $2 million in loans through the Revolving Loan Program. As a revolving loan program, proceeds from loan repayments will flow back into the program and become available to loan again.
Individual Loan Limits & Terms
Loans made through the Revolving Loan Program for Affordable Housing are for the purchase of property for the sole purpose of affordable housing. Loans are not permitted to be used to cover ancillary costs associated with the purchase (e.g. appraisal, recording fee, legal review).
Loan periods will vary and be based on each request. Individual loans will not exceed $1 million.
Borrowers will be expected to repay the loan’s principal plus any interest accrued at the loan’s maturity. Borrowers can prepay their loan at no penalty, shall financing be secured earlier than the loan’s maturity date.
Property Types
The following types of property can be purchased with a loan from the Revolving Loan Program for Affordable Housing:
A single-family home or multi-family home
Unimproved or improved land
Property with a single-family home and/or multi-family home
Application Process
Eligible borrowers will work with LCCHO to collect the following information in advance of a loan request from FCH:
- Property Details
- Generally, FCH will seek to understand the following about the to-be-purchase property:
- Land and Building Specifics
- Actual/Potential Number of Housing Units
- Significant Infrastructure Needs
- Estimated per unit cost at the time of acquisition
- Generally, FCH will seek to understand the following about the to-be-purchase property:
- Proposed Loan Period
- The proposed loan period should be a conservative estimate developed in partnership with LCCHO of when long-term or permanent acquisition funds will likely be secured for the to-be-purchased property.
- Copy of Appraisal
- Copy of Property and Liability Insurance
- Commitment Letter from a Title Insurance Company
Additional information and documentation may be required, depending on property specifics.
Loan Processing
At FCH, we recognize that each loan request is unique. Our process is designed to:
- Meet each eligible borrower at any stage of the purchasing process
- Request due diligence specific to the property being purchased
- Protect FCH’s investment funds
Expected Processing Times for Eligible Borrowers
| Stage | Action | Processing Time |
| Initial Review | Borrower Information Submitted | Within 3 business days |
| Loan Request Review | Loan Request Submitted | Within 7 business days |
| Due Diligence Review | Due Diligence Submitted | 2 business days |
| Loan Payment | Loan Considered ‘Clear to Close’ | 7 business days |
Details
Initial Review: FCH staff will review and update eligible borrowers of their status within 3 business days after submission through our portal.
Loan Request Review: FCH and LCCHO staff will review the loan request and update the borrower’s status within 7 business days. At this time, FCH staff will provide details of all required due diligence.
Due Diligence Review: As due diligence is completed FCH and LCCHO staff will review submitted due diligence within 2 business days.
Loan Payment: Once a loan is ‘clear to close’ (all due diligence submitted and approved), FCH requires 7 business days to process loan payment.
Note for Borrowers: Plan to close approximately 2 weeks after you anticipate completing all required due diligence for the loan.
As an eligible borrower, what are my steps to secure a loan through the program?
All eligible borrowers will be required to share organization specific information (e.g. Annual Budget, 990) with FCH in advance of an individual loan request. Borrowers are welcome to submit this in advance of a request or at the time of their loan request (or when a property hits the market). Receiving this information in advance will ensure that FCH can work swiftly to approve individual loan requests.
Step 1: Alert LCCHO of a potential property acquisition, aligned with your community’s approved Affordable Housing Plan.
Step 2: Provide necessary information and/or complete necessary steps to assist FCH and LCCHO in their assessment of the to-be-purchased property, including:
- Property Details
- Listing/Property Summary/Deed
- Relevant Infrastructure Needs
- Purchase Details
- Authorization Information
- Minutes from Board Meeting Approving Purchase
- By-laws or Minutes Demonstrating Appropriate Permissions of Organization’s Signatory
Loans are also contingent upon FCH receiving, minimally:
- Copy of Appraisal
- Copy of Property and Liability Insurance
- Commitment Letter from a Title Insurance Company
Step 3: Secure additional funding to support the purchase of the property not covered through a loan from the program, such costs include, but are not limited to:
- Legal counsel
- Recording Fees and Other Taxes
- Transfer Fees
- Insurance
- Property Taxes
- Appraisal Fee
- Inspection Fee
- Title Insurance
Step 4: Coordinate with legal representation to properly record a Mortgage on the municipal land records associated with the loan held between FCH and your organization.
2024 Loan Terms
In 2024, FCH will offer loans at a 3% annual interest rate.
Please note, that this interest rate will be updated each calendar year (January – December), based on current market conditions.
Since FCH investment funds, not grant funds, are being used for this program, it is our intention that all investments made through this program keep pace with inflation.
