Housing Opportunity Bond Financing
The Housing Opportunity Bond Fund (HOB) was created to provide gap financing to address a growing need for affordable workforce housing units across the income spectrum for homeowners, builders, developers and community housing development organizations in the City of Atlanta.
Moneys held in the program fund will be used for low interest loans to developers to finance in part the acquisition, construction or renovation of housing. These funds may be used in conjunction with conventional financing, bond financing or other private/public financing to construct and/or rehabilitate residential housing and finance predevelopment and site development costs. No HOB loan may be made or unconditionally committed to be made unless the developer has evidence of a firm commitment letter from funding sources detailing the terms and conditions for the balance of the total costs of the housing development.
The obligation to repay the loan shall be evidenced by a promissory note and shall be secured by a deed to secure debt. Each housing project financed with HOB funds shall be regulated by a land use restriction agreement for a minimum of 15 years. Funding is subject to availability.
- New Construction or Acquisition and Rehabilitation
- Conversion of an existing property not being used for housing
- Affordability period is the greater of 15 years or as long as the loan is outstanding
- Developments must contain set asides of at least twenty percent (20%) of the units of comparable size and finish of the market rate units to persons at 60% of the Area Median Income (“AMI”). See http://www.huduser.org/portal/datasets/il.html for AMI limits.
- 15% of the units must be set aside for market rate tenants with no income restrictions
- Be located within the City Limits of Atlanta
- All workforce units must be comparable in size and quality to market rate units within the same development
- Project must demonstrate evidence of funding need.
Use of Funds:
- Funds may be leveraged with conventional, bond, or other private or public financing
- Funds serve as gap/bridge loans only; Will be underwritten based on need
- Used as second mortgage loan (gap financing)
- Loan cannot exceed the lesser of $25,000.00 per affordable unit or 20% of the capital stack (excluding fees paid to a developer or its affiliates)
- Developer must have experience commensurate with scope and size of the project
- Developer must have success in leveraging additional funds
- Developer must have a successful track record of property management and marketing
- Development must meet sustainability requirements
- URFA encourages developers to plan/develop projects that are located in the following areas:
- Economic Development Priority Areas
- Qualified Census Tracts
- Difficult to Develop Zones
- Within 1/4 mile of MARTA Mass Transit, Atlanta Streetcar, or Atlanta Beltline
- Within a Tax Allocation District (TAD)
- Development must complement and enhance the existing character of the neighborhood
- NPU Letter