McKinney Act Loan Program
McKinney Act Loans are short term predevelopment "bridge" loans that can be used to finance the acquisition, predevelopment and rehabilitation costs associated with housing development. Non-profit and for profit developers building affordable housing in the District of Columbia are eligible for McKinney Act Loans. The funds may be used for one or the more of the following purposes in furtherance of the DCHFA's single family and multifamily programs.
- Pre-development and development soft costs
- Construction or rehabilitation
- Down payment closing cost assistance
- Mortgage interest rate buy down
- Credit enhancement or loan guarantee
- Ancillary or functionally related recreational, health, educational or social services facilities that are integral to housing occupied by very low income persons and families
- Equity bridge loans
- Other forms of assistance as permitted by the Act.
Below is a list of general program guidelines:
- Short term bridge loan (typically 2 years)
- No individual or related or affiliated entity shall have more than $1 million in McKinney Act Savings loan outstanding at any one time
- Can be used for predevelopment activities associated with providing affordable housing
- Can be used in conjunction with the MMRB product
- The interest rate is priced at 30 day LIBOR plus 300 bps
- Affordability Requirements
- The developer/sponsor must set aside units for households with incomes at or below 50% of the AMI adjusted by family size.
- A 10 year restricted use covenant, which runs concurrently with the bond and LIHTC affordability covenants, will be placed on the property.
Additional information and an application can be found in the McKinney Act Savings Fund Loan Guidelines.