Capital Fund Financing Program (CFFP)

HUD’s Fifth, and Possibly Final Maximizing Leverage Conference

HUD is holding its fifth, and possibly final Maximizing Leverage Conference in Atlanta on June 12th and 13th. The leveraging tools covered by this conference are particularly important in the era of Asset Management and diminishing appropriations, in which PHAs must become ever more disciplined about strategic planning and implementation, and ever more creative about utilizing their public housing assets to leverage non-public housing funds. HUD continues to refine the Maximizing Leverage Conference to be responsive to the needs of Public Housing Authorities. The Atlanta Maximizing Leverage Conference will include training on Strategic Planning and Asset Management, basic and advanced sessions on the Capital Fund Financing Program, Low-Income Housing Tax Credits, Rating Agencies, basic and advanced Mixed Finance, and Energy Performance Contracts. Click on the link below for details on the conference and registration.

There will be a separate training for Field Office staff on June 11th. This session will cover the role of the field office in CFFP, strategic planning, HOPE VI, Mixed Finance. A separate registration is required for the June 11th session. FO staff are encouraged to attend the June 11th session, and with the approval of their supervisors, may attend all three days of training.

Maximizing Leverage Atlanta Conference

Summary

Some PHAs may not have enough funds in a single year to be able to make all of the improvements necessary to adequately maintain their public housing. As a result, PHAs may take advantage of the financing element of the Capital Fund. Under the Capital Fund Financing Program (CFFP), a PHA may borrow private capital to make improvements and pledge, subject to the availability of appropriations, a portion of its future year annual Capital Funds to make debt service payments for either a bond or conventional bank loan transaction.

PHAs may anticipate a review time generally between 60 and 90 days. The overall review timeline will depend upon the completeness of the Proposal and the responsiveness of the PHA team. Generally, PHAs should receive HUD comments on their initial submittal within 30 to 45 days. To the extent that a Proposal is approvable, approval should occur within 30 to 45 days after HUD’s comments are provided, depending upon the completeness of the initial submittal, and the responsiveness of the PHA team. To the extent that the approval of the CFFP is needed to meet deadlines associated with the use of the CFFP proceeds (such as a mixed finance transaction that uses LIHTCs that have carryover or PIS requirements), PHAs should be conservative in projecting HUD review timelines. PHAs are advised to allow for unforeseen issues that might present themselves during the review process and challenge the PHA team’s ability to resolve in a timely manner.

The loans or bonds are obligations of the PHA. HUD does not guarantee or ensure these loans or bonds. The PHA obligation is subject to the availability of appropriations by Congress and compliance with statutory and regulatory requirements.

A PHA must obtain written HUD approval prior to executing any document that would encumber or pledge as collateral any Public Housing assets. This includes both physical assets and future Public Housing funding, such as Operating Funds or Capital Funds. In order to receive HUD approval, a PHA must submit a financing proposal that includes a term sheet, financial documents, and a justification for the use of Capital Funds for financing.

1. Approval - PHAs must request approval from the Deputy Assistant Secretary, Office of Public Housing Investments.
2. CF Pledges - Generally no more than 33% of the PHA's current annual CF grant adjusted for any proposed or planned demolition or disposition or other activity that would result in a reduction of the PHA units count or otherwise reduce CFP Funds appropriated or available to the PHA. All pledges are subject to the availability of appropriations.
3. Term - Generally, no more that 20 years.
4. Public Housing Requirements - Since the proceeds from a CFFP transaction are generated via the pledge and use of Capital Funds, HUD considers CFFP Proceeds to be, for all intents and purposes, Capital Funds. PHAs pursuing any type of CFFP transaction must follow all statutory and regulatory requirements related to the Capital Fund Program in regard to the development and implementation of their CFFP Proposal.
5. Other Financing/Approvals - If a PHA's proposed use of the proceeds would require other HUD approvals, separate proposals/submissions, and separate approvals must be obtained. CFFP Proposal approval can occur prior to related approvals, but will be conditioned upon those approvals, and generally will expire within 90 days of issuance.
   
   Proposals Approved to Date - List of PHAs approved to Date (alphabetical list by state) (MS-Excel, 86 KB)


Proposals Approved to Date - List of Transactions Approved To Date (chronological list) (MS-Excel, 67 KB)

	How Does a PHA Apply?
	The Role of The Field Office
	Guidance for Legal Documents
	Post Approval Documentation Requirements
	Contact Information for CFFP Team
	Maximizing Leveraging