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The Rental Housing Production Program provides low interest gap financing loans to developers for the acquisition, rehabilitation and/or new construction of rental housing, located in Anne Arundel County, serving households earning at or below 60 percent of the area median income.

Loan funds through this program are typically combined with a variety of other funding sources, including private loans, public funds (e.g. Low Income Housing Tax Credits, federal Section 202 funds, and Maryland Bond funds) and State loans. Depending on the affordability of the project and the gap in financing needed to make the project viable, loan funds through this program may be in the form of an amortized loan, cash flow loan, or a deferred loan. A lien is placed on the property to ensure that the housing units are affordable to low income households for a specified time period, typically 30 years.

How do I apply for Rental Housing Production Program Funds?

We encourage developers considering submitting an application for Rental Housing Production Program funds to contact ACDS and discuss the project well in advance of submitting an application. Staff at ACDS will meet with the developer to gather more information about the project and the intended beneficiaries and review the potential challenges of the project, the estimated timeline for development, the amount of funds being requested, and review the application process.

Call (410) 222-7600, ext. 151 or e-mail info@acdsinc.org to request an application or to learn more about the Rental Housing Production Program. Rental Housing Production Program applications are accepted at any time. A copy of the application and checklist of required submittal items can be downloaded here.

Income Limits

Household Size 1
Person
2
Person
3
Person
4
Person
5
Person
6
Person
Income Limits $35,520 $40,560 $45,660 $50,700 $54,780 $58,860

As income limits are subject to periodic adjustments, you may want to call our office to confirm your eligibility.

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Frequently Asked Questions

  1. What is the timeline for receiving Rental Housing Production Program funds?
  2. What types of rental projects have received financing in the past?
  3. What is the interest rate charged for these funds?
  4. What legal documents must be executed in connection with this loan?

1. What is the timeline for receiving Rental Housing Production Program funds?

Once a Rental Housing Production Program application is submitted, ACDS will begin its underwriting and due diligence processes. ACDS will work with the developer and other lenders to coordinate the schedule for settlement. This timeline will vary depending on the complexity of the project, the other funding agencies involved in the transaction, whether or not the project is requesting a Payment in Lieu of Taxes (PILOT) from the County, as well as how the developer is progressing in submitting the items required for settlement such as the building permits, and committments from the other sources of financing.

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2. What types of rental projects have received financing in the past?

ACDS has provided funds to various projects, including new construction of rental apartments for the elderly, new construction of “lease to purchase” townhouses for families, and acquisition and rehabilitation of rental apartments for seniors and families. The following are two examples of recently funded projects.

College Parkway Place

College Parkway Place is an affordable housing community located just outside of the City of Annapolis. The developer, Shelter Development, LLC, acquired and renovated College Parkway Place and preserved 170 affordable rental units for low income seniors and families. The project provides services for the families and seniors living at the property, including meals, medical, transportation and other services for seniors, and activities and recreational opportunities for families. The sources of funds utilized to complete the project included tax credit and bond proceeds allocated through the Maryland Department of Housing and Community Development, in addition to a $530,000 loan received from the County through ACDS. Below is a listing of the funding resources exemplifying the numerous sources required for the project, in addition to the portion of funding provided through an ACDS loan.

Tax Exempt Bond Proceeds $10,575,000
Low Income Housing Tax Credit Equity 3,705,160
Residual Receipts Loan 1,350,000
Interim Income 725,000
Deferred Developer Fee 634,956
HOME Loan Provided by ACDS
530,000
(cash flow loan at 4% interest with a 40 year term)
 
Total Project Cost $17,520,116

Homes at the Glen

Homes at the Glen is a newly constructed 56 unit townhouse development that serves very low income families with incomes at 50 percent of the area median income or below. The developer, Homes for America, created Homes at the Glen as a lease to purchase community. After 15 years, the units will be available for sale to first time homebuyers and preference will be given to the families currently renting the units. The sources of funds utilized to complete the project included tax credit equity and a second mortgage through the Maryland Department of Housing and Community Development in addition to a $687,700 loan received from the County through ACDS. Below is a listing of the funding resources demonstrating the numerous financing sources needed to make this project financially feasible.

Low Income Housing Tax Credit Equity $3,843,762
Private First Mortgage 1,853,000
Second Mortgage through DHCD 1,301,036
Deferred Developer Fee 224,253
HOME Loan Provided by ACDS 687,700
(part amortized and part cash flow loan at 2% interest with a 30 year term)
 
Total Project Cost $7,909,751

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3. What is the interest rate charged for these funds?

The interest rate varies and is based upon staff analysis and underwriting to determine the project’s ability to repay the funds. Typically interest rates are from zero to five percent. Loan repayments can be deferred for a specified time period, or based on a project’s available cash flow.


4. What legal documents must be executed in connection with this loan?

Typically, ACDS will require a Deed of Trust, Deed of Trust Note, Declaration of Covenants, and if funds are used for construction, a Construction Loan Agreement.

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