Press Release

The Nonprofit Preservation Fund (NPF) is a partnership between Montgomery County and HOC to provide low-interest, medium-term loans to support the acquisition and preservation of naturally occurring affordable housing by nonprofit and public developers in the County.

Background

The County has over 25,900 unrestricted housing units affordable to households earning under 65% of the area median income (AMI) however, the 2020 Planning Department Preservation Study identified the risk of losing between 7,000 to 11,000 affordable housing units due to expected rent increases.

Funding Authorization

On April 2, 2024, the County Council authorized the use of $20 million for the NPF, with the goal of reaching $50 million in Fiscal Year 2025.

Eligibility Criteria

To qualify for capital lending, entities must be a nonprofit organization with experience in affordable housing development or be the local housing authority. Loans will be made for specific properties, which must:

• Have been constructed at least 20 years ago;
• Have other necessary capital identified for the acquisition, unless this requirement is conditionally waived for 90 days;
• Restrict rental increases on the affordable units to no more than the Voluntary Rent Guidelines (VRG) issued by the Department of Housing & Community Affairs (DHCA);
• Agree to a minimum 30-year agreement on the affordability restricted units; and
• Achieve at least 20% of units at 50% of AMI or below and 10% of units at Moderately Priced Dwelling Unit (MPDU) level or below within three years of acquisition.

Application Process

Lending applications will be considered on a rolling basis and are subject to available funds. HOC will conduct underwriting for each loan and will connect applicants to potential investors for individual projects. DHCA will administer the Fund and will review and approve or reject loan recommendations. HOC is eligible to apply for up 25% of the funds for its own projects.

Loans will include a 1% origination fee, except for loans to HOC. The maximum loan term is for seven (7) years, which may be extended to a total of ten (10) years in certain instances.

Prior to submitting your application, please review and ensure all items on the HOC Nonprofit Preservation Fund (NPF) Checklist are addressed.

Please refer to the Scoring Template to understand how the applications will be evaluated.

When you are ready to apply, please complete the Multifamily Intake Form and email it to npfapplication@hocmc.org.