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Budget Year / Version:  
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Description

This project provides funding to address the urgent challenge of preservation and development of affordable housing in areas at risk of rent escalation to higher market rents, including the Purple Line Corridor and other County transit corridors.

The funds will be used to provide seed money to establish a public-private preservation commitment of funds which will proactively leverage public and private capital to support affordable housing developers in preserving and producing targeted affordable housing. The County commitment of the funds will allow establishing parameters of a contractual agreement with a fund manager, such as a Community Development Financial Institution (CDFI), which would coordinate commitment of private capital to align with the County's funds and support acquisitions of properties to create long-term affordability. The County's project funds would be dedicated as available to acquisition transactions in combination with the private capital under predetermined terms, with County lending based on approval of each transaction. The approved funds are expected to support financing activity within six months of allocation, based on time needed to identify partners, develop investment guidelines, and document responsibilities. The funds will be used to assist affordable housing developers purchasing properties offered for sale, and potentially to purchase property from the County which it acquires under the Right of First Refusal law. A portion of the units in these properties must serve households with incomes that are at or below incomes eligible for the Moderately Priced Dwelling Unit (MPDU) program. Loan terms will primarily be short-term (up to 36 months) in duration. Funds are expected to revolve based on refinancing or redevelopment financing.

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Phase

Planning Stage

Status

Active
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Budget Snapshot
$14M Total
Expenditures/Funding
$14M 6 Year Total
Expenditures/Funding
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Justification

The County has a severe shortage of affordable housing and needs to maximize and leverage private investment in the preservation and creation of dedicated affordable housing. The fund structure will establish predetermined underwriting parameters and qualifications for rapidly purchasing targeted properties. The fund structure will allow time for implementing a range of longer-term actions addressing specific property opportunities, from rental agreements to redevelopment. The expectation is that these funds will leverage approximately $4 for every $1 of County funding. Opportunities to purchase property utilizing the County's Right of First Refusal could arise without advance notice and would not be planned in advance. Other targeted acquisitions would benefit from access to a dedicated source of ready funding. Properties may be acquired by the County, the Housing Opportunities Commission, non-profit developers or other entities that agree to maintain affordability, or develop/redevelop a property for affordable housing.
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Other

Resale or control period restrictions to ensure long-term affordability should be a part of projects funded with these monies.
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Fiscal Note

The County Executive has requested appropriation for FY21 as shown above in the cumulative appropriation. Future loan repayments are expected and will be used to finance future housing activities in this project.

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Coordination

Montgomery County Revenue Authority, Housing Opportunities Commission, non-profit housing providers, private sector developers, and financing institutions.
Budget Snapshot
$14M Total
Expenditures/Funding
$14M 6 Year Total
Expenditures/Funding
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Project Details
Project NumberP762101
Date Last Modified01/13/21
Administering AgencyHousing & Community Affairs
CategoryCommunity Development and Housing
SubCategoryHousing (MCG)
Planning AreaCountywide
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Total Expenditures by Cost Element (000s)
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Total Funding by Source (000s)
EXPENDITURES (000s)
Cost ElementsTotalThru FY20Rem FY20Total 6 YearsFY 21FY 22FY 23FY 24FY 25FY 26Beyond 6 Years
Planning, Design and Supervision00000000000
Land1400000140008000600000000
Site Improvements and Utilities00000000000
Construction00000000000
Other00000000000
Total Expenditures1400000140008000600000000
FUNDING (000s)
Funding SourceTotalThru FY20Rem FY20Total 6 YearsFY 21FY 22FY 23FY 24FY 25FY 26Beyond 6 Years
Recordation Tax Premium (MCG)1400000140008000600000000
Total Funding Sources1400000140008000600000000
APPROPRIATION AND EXPENDITURE DATA ($000s)
Appropriation FY 21 Request0
Year First Appropriation
Appropriation FY 22 Request6000
Last FY's Cost Estimate14000
Cumulative Appropriation8000
Expenditure / Encumbrances0
Unencumbered Balance8000