The California Department of Housing and Community Development (Department) is pleased to announce the release of this Notice of Funding Availability (NOFA) for approximately $57 million in funds for the Local Housing Trust Fund (LHTF) Program. This funding provides Matching Grants to Local Housing Trust Funds established by cities and counties, Native American Tribes and incorporated 501(c)(3) nonprofit organizations. Eligible activities include construction loans and/or permanent financing loans to pay for predevelopment costs, acquisition costs, and other costs associated with the development or rehabilitation of Affordable rental housing projects, or Emergency Shelters, Transitional Housing, Permanent Supportive Housing, and Affordable homebuyer/homeowner projects, including assistance to income-eligible households to purchase for-sale housing units or to rehabilitate an owner-occupied dwelling. Funds may also be used for the construction, conversion, repair, and rehabilitation of Accessory Dwelling Units or Junior Accessory Dwelling Units.
NOFA Release May 3, 2021
Application Due Date August 3, 2021
Award Announcements October 2021
Eligible Applicants An applicant must be:
1. A city, county, or city and county that has created, funded, and operated an existing Local Housing Trust Fund or that has created and funded a new Local Housing Trust Fund in compliance with Guidelines Sections 102(a)(1), 102(a)(2), and 102(a)(3). A Local Housing Trust Fund or Regional Housing Trust Fund that was created, funded, and operated by a combination of two or more cities or counties must agree in its application to utilize program funds only for Eligible Projects located in cities or counties that at the time of application have met the requirements outlined in Guidelines Section 102(a)(4).
2. An existing or new Local Housing Trust Fund that is a charitable nonprofit organization as defined by Section 501(c)(3) of the Internal Revenue Code and which complies with Guidelines Section 102(b)(1), 102(b)(2) and 102(b)(3).
3. A Native American Tribe, or sect of Tribes, that has created, funded, and operated an existing Local Housing Trust Fund, or that has created and funded a new Local Housing Trust Fund in compliance with Guidelines Section 102(c)(1), 102(c)(2), and 102(c)(3).
Eligible activities Pursuant to Guidelines, Section 105, the LHTF funds shall be allocated in compliance with all of the following:
1. To provide construction loans and/or permanent financing loans at simple interest rates of no higher than three percent per annum, for payment of predevelopment costs, acquisition, construction, or rehabilitation.
2. Administrative expenses may not exceed five percent of program Funds and Matching Funds.
3. A minimum of 30 percent of program Funds and Matching Funds, after deducting administrative expense, shall be expended on assistance to Extremely Low-Income Households. To comply with this requirement, dwelling units or shelter beds must be Affordable to and restricted for Extremely Low-Income Households with household income of no more than 30 percent of Area Median Income (AMI).
4. No more than 20 percent of the program Funds and Matching Funds, after deducting administrative expense, shall be expended on assistance to Moderate Income Households. To comply with this requirement, dwelling units must be Affordable to and restricted for Moderate-Income Households with household income of no more than 120 percent of AMI.
5. The remaining program Funds and Matching Funds shall be expended on assistance to Lower-Income Households. To comply with this requirement, dwelling units must be Affordable to and restricted for Lower-Income Households with household income of no more than 80 percent AMI.
The minimum application request by an Applicant that is an existing Local Housing Trust Fund shall be $1 million. The minimum application request by an Applicant that is a new Local Housing Trust Fund, but which is not a Regional Housing Trust Fund, shall be $500,000. The minimum application request by an Applicant that is a new Local Housing Trust Fund, which is also a Regional Housing Trust Fund, and which is utilizing Permanent Local Housing Allocation Funds as Matching Funds, shall be $750,000. The maximum application request for all Applicants shall be $5 million. Fifteen percent of the funds made available by this NOFA shall be reserved for Local or Regional Housing Trust Funds meeting the definition of “new Local Housing Trust Fund.” In the event there are insufficient applications from new Local Housing Trust Funds that pass threshold, the funds shall be used for applications from existing Local Housing Trust Funds.
Matching funds requirements
1. All program Funds provided pursuant to this section shall be matched on a dollar for-dollar basis with dedicated sources of funding, such as taxes, fees, or loan repayments, or public or private contributions by the Applicant. Lines of credit and loans received by the Local Housing Trust Fund are not eligible sources of Matching Funds.
2. An application for program funds shall not be considered unless the application contains required documentation of the deposit in the Local Housing Trust Fund of the local Matching Funds, and the identity of the source of Matching Funds, or evidence of a Legally Binding Commitment to deposit the required Matching Funds, and the identity of the source of Matching Funds.
3. Funds restricted for housing use by state or federal law (such as funds from the Home Investment Partnerships Program, the Community Development Block Grant Program, redevelopment agency low- and moderate-income housing fund set-aside funds, or state housing programs administered by the Department) shall not be considered Matching Funds. However, Permanent Local Housing Allocation program funds may be considered Matching Funds for Regional Housing Trust Funds.
4. Matching Funds shall be On Deposit prior to disbursement of program Funds.
5. Matching Funds must be utilized on a dollar-for-dollar basis for the same Eligible Project for which program Funds are used, as required by HSC Section 50843.5(c).
6. For an Existing Housing Trust Fund, a public or private source, or sources, of Matching Funds, must be Ongoing Revenues totaling at least an average of $100,000 per year for three years after the date of the program award is required.
7. For a New Housing Trust Fund, public or private sources of Matching Funds must be Ongoing Revenues sufficient to pay for the Trust Fund’s operating costs for a minimum of five years after the date of the Program award is required.
8. Ongoing Revenues are required to be derived from dedicated sources of consistent funding, such as taxes, fees, repayments of loans made by the Trust Fund, or regular annual public or private contributions. Ongoing Revenues may not include one-time donations, such as land donations or large bequests, and may not include loans or lines of credit.
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