Primero Loan Program

MFA's Primero Loan Program is a flexible, low cost loan program created in 1993 with the overall purpose to create a funding source that meets the financial needs of affordable housing initiatives that cannot be accommodated by existing sources of financing. It will develop sources and mechanisms that address multiple barriers to the creation and financing of affordable housing, including but not limited to secondary market limitations with respect to credit and collateral, high subsidy needs associated with housing for very low, low, and moderate income, workforce housing, and special needs tenants, inability to fund infrastructure and other development related prerequisites through conventional housing programs, and inefficient or otherwise inadequate delivery systems for underserved markets.

Eligible Projects and Programs

Funding may be approved for specific housing developments or for programs to be operated by agencies to meet local housing needs. Owner-occupied projects of any size maybe financed under this program, during any stage of the development process. Public and tribal agencies, for-profit and nonprofit sponsors are all eligible. Applicants must provide evidence of businesslike organizational operations, as well as experience in housing development or partnership with an experienced development team.

Application

1. Pre-development application - Primero Loan Program funding for pre-development expenses such as environmental assessments, appraisals, title searches/insurance, architectural and engineering fees, or market studies.
2. Homeownership development application - Funding for the acquisition, construction, or rehabilitation of single-family homes to be owned by income qualified household.
3. Land banking credit application - A line of credit for the acquisition of property for the development of affordable housing projects. This opportunity is only available to qualifying nonprofit, public, and tribal housing development entities. Applicants must demonstrate: a proven ability to process a piece of land through the development process; ability to move quickly on development; and a history of completed housing developments. They must also provide a business plan that supports housing development activities to be eligible for this opportunity.

Applicants should provide all items listed on the appropriate application checklist.

Loan Terms

Development loans will be underwritten and structured according to sound lending practices. Interest rates are typically below-market and are determined at MFA's discretion. Primero loans are repaid through subsequent financing sources or in some cases through cash flow. Terms cannot exceed five years, but loans do not have to be amortized during their term. Loans are secured whenever possible, but they may be subordinated to other debt. The maximum loan amount is $3 million, and availability of funds varies. Terms for Lines-of-Credit may not exceed 3 years for single-family home vertical construction and rehabilitation, and Infrastructure Loans may not exceed 5 years.

How To Apply

Application forms can be obtained from MFA and submitted at any time. Complete applications are processed and approved within 60 days. All loans are reviewed by staff and loans above a prescribed amount will be approved by the MFA Board of Directors. Discussions with staff are recommended prior to preparation of applications in order to identify appropriate application materials and make initial eligibility determinations.