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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PRP provides funding to rehabilitate, fund a short-term capitalized operating subsidy reserve, and extend the long-term affordability of HCD-funded rental multifamily housing projects that are at-risk of conversion to market-rate housing. The NOFA outlines the project eligibility criteria, application requirements, and timelines for applicants applying for funding.
- $10 million for small projects, defined as 20 units or less.
- $25 million residential hotels, as defined in the MHP Guidelines Section 7301 (PDF).
- A $25 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, 2028.
- 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 be:
- Rental housing consisting of five or more units
And meet at least one of the following criteria:
- All HCD affordability restrictions(s) have expired or will expire on or before December 31, 2033;
- Project was foreclosed on by the Department or another public lender, and has at least one HCD document containing affordability restrictions that have not terminated or otherwise removed by HCD;
- Received a loan extension through Housing Loan Conversion Program or Loan Portfolio Restructuring programs but was not awarded funding for substantial rehabilitation work; OR
- Originally funded by a Legacy Program as defined in the NOFA/Guidelines and has not received funding for substantial rehabilitation work in the past 15 years.
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 12 months of award, or 18 months if using Low-Income Housing Tax Credits.
- 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.
- A certification that Sponsor has sufficient financial capacity to fund all required predevelopment expenses prior to construction close.
- Each Sponsor is limited to submitting no more than two applications, not including any application for the small project set-aside.
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 by the date specified in the table below.
|2023 NOFA Release
|December 28, 2023
|January 11, 2024
|Application OTC Period Begins
|March 28, 2024
Deadline for Set-Aside Applications
|April 29, 2024, 4:00 PM
|Deadline for General Pool Applicants
|May 28, 2024, 4:00 PM
|Continuously as applications are approved, approximately 4-5 months after application submittal, but no later than December 31, 2024
|Funds encumbered through an executed Standard Agreement
|No later than December 31, 2025
|Capitalized Operating Subsidy Reserve expenditure deadline
|December 31, 2028
The PRP Excel application form for the 2023 NOFA is the first item in the list below. It is an Excel workbook. Please complete the PRP Excel application. The last tab of the PRP Application workbook contains a list of required application documents to be uploaded to the Portal, along with the application form workbook, when the Portal is opened on March 28, 2024 at 8:00 A.M.
General Program Documents
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.