QuickStart – three-year term with HEART option to provide two additional one-year extensions for a total term of five years.
SemiPerm Loan – Two loan options: 15- and 10- term loans; second loan type includes HEART option to extend for up to five additional years, for a total term of 15 years.
(a) QuickStart (QS)
The QS Program is designed to provide short-term, quick turn-around loans to assist with the early stages of project development. QS loans have the following specific terms and conditions:
- Loan term of 3 years with possibility of an extension of two one-year extensions, for a total term of five years.
- Interest is deferred; loan principal and all accrued interest are to be paid off at loan maturity.
- Download Quickstart loan terms and interest rate here.
This program is intended to assist: (1) developers with more complex projects needing acquisition and/or predevelopment funds and which projects need longer timeframes to complete predevelopment activities (such as securing entitlements and other financing commitments, undertaking relocation, etc.) before they can reach construction start; and (2) owners of existing affordable housing developments to address immediate needs, including refinancing to preserve affordability, and rehab while awaiting the necessary time to lapse before they can seek to refinance with tax credits or other funding source. The following are terms and conditions specific to this program:
- Loan term of six to ten-years with possibility of extension for up to five additional years, for a total term of 15 years.
- Loans also available for 15 year terms at the outset.
- Repayment terms are negotiable, but borrower will at the minimum need to make periodic interest-only payments.
- Download SemiPerm loan terms and rates here.
(c) Requirements of Both Loan Programs:
- Funding must be secured by a deed of trust against an interest in the real property.
- An affordability deed restriction will be required to be recorded against the property upon completion of the project. This restriction will be either recorded by HEART or HEART will defer to another lender whose terms and conditions for affordability compliance are consistent with HEART requirements. Restriction will be for not less than 55 years and recorded against the real property interest separate from any loan obligation.
- Project must be located within the jurisdiction of the member agencies of HEART (Download HEART current member roster here.)
- Project must be located in a jurisdiction that has an adopted housing element or one that is under review by State HCD.
- Loans are non-recourse.
- Fees required.
- Permanent or take-out financing should be identified to extent feasible.
Other Specific Requirements:
Qualifying Projects. While the development of rental affordable housing project that increases the overall supply of affordable housing is HEART’s highest priority, projects that will be considered for funding are the following: both new construction and existing housing projects. Also eligible are projects involving conversion of non-residential space to housing units.
Eligible Activities. These include acquisition, predevelopment, construction or rehabilitation, and refinancing to preserve affordability.
Affordability. For projects with 5+ units, not less than 20% or more than 49% of the units will be made affordable with HEART financing. Affordability is defined as units restricted to households earning not more than the San Mateo County HOME Limits (60% AMI) adjusted by household size. Preference will be given to applications offering a greater number of affordable units, based on HEART funding per unit, and/or deeper affordability targeting. Affordability requirements for projects with 4 or fewer units will be negotiated.
For loans made under the SemiPerm Loan Program, for projects of 5+ units, at least ten percent (10%) of the units (no less than one unit) in the Project must be affordable to households at 30% AMI or below.
Funding per Unit. The amount per unit is discretionary, except that the limits will not exceed the HOME Program per unit subsidy limits.
Qualifying Applicants: Any corporation, non-profit or for-profit, or any public agency which intends to either own or substantially sponsor a qualifying project. Applicants must have a demonstrated ability to produce affordable rental housing in the scale for which funds are being requested. Evidence of independent auditing on an annual basis is also required.