For Immediate Release: Tuesday, May 14, 2024
Montgomery County and the Housing Opportunities Commission of Montgomery County ( HOC ) have launched the Nonprofit Preservation Fund ( NPF ) to preserve affordable housing. The NPF will be funded with $50 million by Fiscal Year 2025 to provide low-interest interim loans to support nonprofit developers and HOC in acquiring and preserving naturally occurring affordable housing (NOAH).
The NPF is a partnership between the County’s Department of Housing and Community Affairs ( DHCA ) and HOC.
“Preserving existing affordable housing is essential to any affordable housing strategy. This funding is a key component to protect properties from becoming unaffordable,” said County Executive Marc Elrich. “Additionally, my recommended budget for Fiscal Year 2025 includes $113.2 million for three key Capital Improvement Projects (CIP) focusing on affordable housing acquisition and preservation, nonprofit preservation, and revitalization for troubled communities. Along with our revised ‘‘ Right of First Refusal ( ROFR )’ law, we are assembling funding and partners to preserve affordable housing, which is an urgent need.”
The ROFR law was enacted in 1980 to preserve affordable housing and to prevent tenant displacement. The County, the Housing Opportunities Commission or any certified tenant organization (in that order) must be offered the opportunity to buy the rental housing property before the owner sells it to another party. Amendments made to the law in 2024 enable the County to exercise ROFR while assigning the contract to purchase a property to a qualified affordable housing developer.
The County has more than 25,900 NOAH units, affordable to households earning under 65 percent of Area Median Income (AMI). However, the 2020 Preservation Study by the Maryland-National Capital Park and Commission identified between 7,000 to 11,000 affordable housing units that are at risk of losing affordability due to rising rents. The Nonprofit Preservation Fund was created in 2023 after the County Council approved Resolution 20-175.
“Modeled after our successful Housing Production Fund, the Nonprofit Preservation Fund again leverages our public dollars to amplify our impact,” said Council President Andrew Friedson. “In partnership with our nonprofit housing providers, this effort has been years in the making and will finally position us to make meaningful progress in preserving affordable housing as part of our broader approach to tackling the current housing crisis.”
NPF loan applications will be considered on a rolling basis and are subject to the availability of funds. HOC will conduct an underwriting review of each application and connect applicants to potential investors for individual projects. DHCA will administer the NPF and review for approval of an NPF loan.
“Ensuring that existing housing remains affordable is a core part of HOC’s mission and essential to reaching the goal that all County residents have access to high-quality, affordable housing,” said HOC President and Executive Director Chelsea Andrews. “This new fund is a valuable tool to bring more of our housing supply under the control of mission-driven organizations and preserve these units as affordable in perpetuity. HOC is proud to work in partnership to launch this invaluable resource.”
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To qualify for the NPF fund, a property must be at least 20 years old. Entities must be nonprofit organizations with experience in affordable housing development or be a local housing authority.
“DHCA looks forward to leveraging the new Nonprofit Preservation Fund (NPF) in combination with its Right of First Refusal (ROFR) law to stabilize neighborhoods, preserve affordable housing and prevent the displacement of low- and moderate-income tenants,” said DHCA Director Scott Bruton.
Visit the HOC website for more information and application materials.
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Release ID: 24-231
Media Contact: Sharla Cherry-Quintanilla 240-777-3677
Categories: Housing
For updates and link to press release, see here: http://www2.montgomerycountymd.gov/mcgportalapps/Press_Detail.aspx?Item_ID=45245