Infrastructure Loan Guarantee
In response to a slowdown in infrastructure development and lot production for affordable units, NIFA created the Infrastructure Loan Guarantee Program in 1996. The program is not a direct loan program; rather, it provides a loan guarantee on all or part of a conventionally originated loan for the development of affordable, targeted lots. A loan guarantee reduces the risk to the private lender, thereby increasing the availability of funding for these types of projects.
Applications will be considered for projects that create lots suitable for affordable housing targeting incomes at or below 150% of area median income. The proposed project must be in compliance with the codes and regulations of the community in which it is located, and the work must be designed and supervised by a licensed, professional engineer. Contractors are required to be bonded or bondable, and work performed must be warranted for an appropriate period of time.
The loan for which NIFA provides a guarantee under this program must be originated by a bank or other qualified lender, and must be a first lien loan secured by a deed of trust with title insurance. The Loan-to-Value ratio cannot be more than 90%, after considering an amount for an interest reserve for the initial term of the loan. A loan agreement specifying the terms and conditions of design and disbursement must be approved by NIFA prior to any use of the credit line.
Contact NIFA to discuss your project eligibility and participation in this program.