Proposal Development Funding (PDF)

Making it Work

Proposal Development Funding (PDF) loans help with the up-front expenses incurred during the process of developing an affordable housing project proposal. A PDF loan enables housing proponents to carry out the activities required to bring their proposal to the point where they can apply for mortgage financing.

What is Proposal Development Funding (PDF)?

Proposal Development Funding (PDF) provides repayable interest-free loans to facilitate the development of affordable housing.

Loans of up to $100,000 are available for affordable housing project proposals by non-profit or private sector proponents who can demonstrate that their intended housing project is affordable.

PDF loans will be repayable if the proposed project succeeds. A portion of the PDF loan may be forgiven, if the proponent is successful in adding to the stock of affordable housing, as defined by CMHC.

What is the maximum PDF loan available?

Up to $100,000 is available to develop an affordable housing project proposal. CMHC will determine the actual amount of each loan, depending on the size and complexity of the proposed housing project and how much development work needs to be done.

Who is eligible for funding?

PDF loans will be made available to any proponent who can demonstrate that their proposed housing project will be affordable, including:

• a not-for-profit organization
• a housing cooperative
• a First Nation
• a private entrepreneur
• any other housing proponents who can demonstrate their ability to produce a viable affordable housing project which meets CMHC's criteria.

What are the funding criteria?

There are no restrictions on tenure type or building form. The PDF funds must be used to develop proposals for housing units that will increase the stock of affordable housing, including new construction, conversion from a non-residential use, or conversion from non-affordable housing to affordable housing. Any type of housing is acceptable, as long as it meets the following criteria:

• the project must have at least five (5) housing units.
• the majority of units in a rental project must be below CMHC's Level 1 or Level 2 rent limits for units of a similar type, size, and number of bedrooms in the subject housing market.
• the sale price of homeowner units must be below the market value for similar housing.
• units - whether rental or homeowner - must be modest in size and design
• there must be a demonstrated need for the proposed housing project
• an initial viability analysis must demonstrate how the housing will be produced to meet CMHC's definition of affordability.

What activities can the funds be used for?

Eligible expenses include such items as soil load-bearing tests, environmental site assessments, project drawings and specifications, professional fees, cost estimates, management plan, option to purchase, development permits, contract documents and application fees.

What expenses are not eligible to be paid out of the PDF loan?

• expenditures incurred for activities carried out prior to CMHC's approval of proposal development funding
• expenses not related to the development of the housing project proposal
• ongoing operating expenses of the organization, for example staff salaries and benefits, travel expenses, rental of office space, premiums for liability insurance or other insurance coverage, office supplies or equipment, or other similar expenses
• retainer fees paid to consultants

What are the loan repayment requirements?

A PDF loan is in effect an advance of the capital costs of the project. If the project proceeds, the PDF loan is repaid out of the project's capital financing, normally from the first advance of the mortgage loan. Only the principal amount is to be repaid. CMHC does not charge interest on PDF loans.

While the loan is repayable if the project proceeds, you may not have to pay it all back, if your project meets one of the affordability criteria below:

• If you are successful in producing an affordable housing project with rents below the level 1 limits in the majority of the rental units, or sale prices below market for home ownership units, then 80 per cent of the advanced loan amount will be repayable and 20 per cent will be forgiven.
• If you are successful in producing an affordable housing project with rents below the level 2 limits in the majority of the units, then 65 per cent of the advanced loan amount will be repayable and 35 per cent will be forgiven.

If the proponents are successful in producing housing, but are unable to achieve rent levels or sale prices low enough to meet CMHC's definition of affordable, then the full amount of the PDF loan is repayable, without interest.

How does the application process work?

You will be asked to provide a comprehensive description of your affordable housing project proposal, along with confirmation of need and demand for the planned housing. You will also be expected to provide a preliminary viability analysis to demonstrate how the housing produced will meet CMHC's affordability criteria. CMHC'S Partnership Representative can help you with the application. An application package can be downloaded or to obtain a printed copy, contact your local Partnership Representative or call 1 800 668-2642.

 Download the application package in PDF format