Portfolio Reinvestment Program (PRP)
The Portfolio Reinvestment Program (PRP) aims to preserve existing HCD-funded affordable housing projects by extending and restructuring affordability agreements; extending loan maturity dates; providing new low-interest long-term loans for rehabilitation; and providing forgivable loans to capitalize short-term operating subsidies.
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Approximately $332.5 million in Portfolio Reinvestment Program (PRP) funding will be made available to HCD-assisted projects whose HCD affordability restrictions have expired and not been removed from the project, and/or have HCD affordability restrictions that are expiring on or before December 31, 2032, or which have been foreclosed on by the Department or another public lender.
- $50 million for small projects, defined as 20 units or less.
- $100 million residential hotels, as defined in the MHP Guidelines Section 7301 (PDF).
- A $50 million set aside for Projects that have been foreclosed on by the Department or by another public lender.
Permanent loans for rehabilitation
- Maximum award amount: $25 million.
- Loans will have a 30 - 55-year term;
- 3 percent simple interest on unpaid principal balance, deferred.
- Payments in the amount of 0.42 percent are due annually.
- The unpaid balance of is due and payable at the end of the loan term.
Forgivable loans for capitalized operating subsidy reserves (COSR)
- Maximum award amount: 25% of PRP Rehabilitation Loan amount.
- Short-term COSR assistance period: construction close through December 31, 2026.
- Forgiveness predicated on compliance with PRP COSR and PRP Rehabilitation requirements.
- Forgivable COSR loans must be paired with PRP Rehabilitation loans. COSR awards are not available on a standalone basis.
To be eligible for PRP, projects must meet both criteria:
- Rental housing consisting of five or more units (or in the case of group homes, rental housing consisting of 5 or more rental bedrooms).
- All HCD affordability restrictions(s) have expired or will expire on or before December 31, 2032, or which have been foreclosed on by the Department or another public lender, and at least one HCD document containing affordability restrictions has not been terminated or otherwise removed by HCD.
An eligible applicant must be the sponsor of an eligible project. A sponsor is any individual, joint venture, partnership, limited partnership, trust, corporation, limited liability company, local public entity, or tribal entity, or any combination thereof that meets the requirements of the PRP NOFA/Guidelines.
Sponsor(s) and borrower(s) may not be in breach or default of the original HCD loan nor under any other HCD programs, except for the maturity of an unpaid loan.
Key Threshold Requirements
- Demonstrate readiness to commence construction within 180 days of award.
- Letter of Interest from a lender for construction financing
- Demonstrate Fiscal Integrity as defined in MHP Guidelines section 7301(j) by the 10th year after the date of recordation of the PRP rehabilitation loan.
Minimum scope of work: address all critical and immediate repairs, and replacements, listed as required 5 years of the date on the third party Property Condition Assessment (PCA) submitted as part of the application.
Application materials for the PRP NOFA must be submitted electronically via the application portal on the Department’s website no later than 5:00 p.m. Pacific Daylight Time on November 30, 2022.
|NOFA Release||March 28, 2022|
|Amended NOFA Release||July 28, 2022|
|Application Release||April 8, 2022|
|Application OTC Period||April 29 to November 30, 2022|
|Award Announcements||Continuously as applications are approved, approximately 4-5 months after application submittal, but no later than May 31, 2023|
|Funds encumbered through an executed Standard Agreement||No later than June 30, 2024|
|Capitalized Operating Subsidy Reserve expenditure deadline||December 31, 2026|
|Permanent Loan Conversion||No later than August 31, 2026|
Submittal instructions for PRP’s application portal will be released separately, on or before the date the application submission window opens.
General Program Documents
The Regulatory Agreement Expiration Report and the Expanded NOFA Amendment List present a list of the Projects that may be eligible for PRP funding according to our database. The Department shall verify eligibility for PRP funding at the time of application. Sponsors with concerns or questions about the information on this list or your Project’s eligibility status should contact the Department at email@example.com.
The Department held virtual PRP Amended NOFA webinars to discuss PRP’s Amended NOFA and Guidelines, project eligibility, program rules, and to take questions from attendees. The Department also held a virtual application webinar to discuss the amended application. The recorded webinars are available under the Resources tab.