Multifamily Bond Program

​​​The purpose of HOC’s Multifamily Bond Program is to increase the construction and rehabilitation of multifamily rental housing for families with limited incomes. Tax-exempt bonds and notes provide construction and permanent financing and ​leverage federal Low-Income Housing Tax Credits​.

HOC accepts a variety of financing structures for multifamily tax-exempt and taxable bonds.

Eligible Types of Housing

Rental housing financed through the program may be new construction, acquisition, and rehabilitation of existing housing, and must contain a minimum of five units. Loans may be provided to refinance existing high interest rate private loans if the refinance is in conjunction with the rehabilitation of the housing. Projects using tax-exempt bond financing must contain complete independent dwelling units. Projects financed with tax-exempt bonds must comply with the Maryland Qualified Allocation Plan in order to receive unallocated 4% Low-Income Housing Tax Credits, and have applied and received an award of Low-Income Housing Tax Credits through the State of Maryland Department of Housing and Community Development.

Eligible Applicants

For-profit and nonprofit developers may apply for Multifamily Bond loans.

Eligible Residents

A sponsor of a project funded with​ tax-exempt bonds has a choice of making 20% of the units available to households earning 50% or less of the area median income, or making 40% of the units available to households earning 60% or less of the area median income. Income averaging may also be utilized.

Loan Terms

Interest rates are based upon the Agency’s bond rate. Loan terms are generally 30 to 40​ years. A first lien position is generally required for all bond loans. All loans funded with tax-exempt bonds must comply with federal requirements establish​ed for tax-exempt revenue bonds.

Mortgage Insurance

All loans must ​be insured ​or have other forms of credit enhancement acceptable to the program. HOC is a participant in the Federal Housing Administration (FHA)/Housing Finance Agency Risk-Sharing Program, which delegates insurance underwriting to state or local Housing Finance Agencies.

FHA Federal Financing Bank Risk-Sharing Program

The FHA Federal Financing Bank Risk-Sharing Program provides low fixed-rate financing for the takeout of construction financing of newly built properties or the refinance or acquisition of existing multifamily properties. Financing can be used with Low-Income Housing Tax Credits and all other capital and operating subsidy programs used to create and preserve affordable housing. This loan product is non-recourse and assumable.

Eligible Types of Housing

Properties may be multifamily rental, or single-room occupancy (SRO) properties of at least 5 units, and may include two or more noncontiguous parcels. For existing properties, project occupancy must demonstrate that it has achieved 93% average occupancy over 12 months prior to the Closing Date.

Eligible Applicants

Loans are available for for-profit and non-profit owners and sponsors.

Eligible Residents

Affordability must include 20% of households at 50% area median income or 40% of households at 60% area median income.

Loan Terms

Maximum 40 years. Loans with a minimum term of 17 years may amortize over a maximum period of 40 years; loans with shorter terms must be fully amortized over the loan term. Interest rates are set by the Federal Financing Bank.

Mortgage Insurance

All loans must ​be insured by HOC’s FHA Housing Finance Agency Risk-Sharing Program.