2026 MHP Gap Funding NOFA

The Multifamily Housing Program Gap Funding Notice of Funding Availability is administered by the California Department of Housing and Community Development and provides substantial state funding to support affordable housing development projects that are ready to proceed but face financing gaps. Announced as part of the Multifamily Finance Super NOFA, this funding opportunity makes approximately $240 million available to assist eligible multifamily rental housing developments serving lower-income households. The program builds upon California’s long-standing commitment to expanding affordable housing by offering low-interest, long-term deferred payment loans to projects that have already received prior state support but require additional capital to begin construction. The primary purpose of this funding opportunity is to close financial gaps for construction-ready projects that have previously secured funding through qualifying Housing and Community Development programs but have not yet commenced construction due to insufficient capital. These projects often rely on tax credit financing, particularly 4 percent federal low-income housing tax credits and tax-exempt bond financing, and delays or limitations in these funding sources have created barriers to project advancement. The program requires applicants to demonstrate readiness to proceed and to commit to applying for the next available funding cycle of bond financing and tax credits, ensuring alignment with broader state housing finance mechanisms. Eligible projects must be multifamily rental housing developments that have received at least one qualifying prior award from specified Housing and Community Development programs and must not have begun construction or closed construction financing. Additional eligibility criteria require that prior awards remain active and valid, and that the project is fully funded except for the requested gap financing. The program places significant emphasis on readiness, including demonstrated financing commitments, site control, and compliance with regulatory requirements. Applicants must also meet threshold scoring criteria, including a minimum point score and specific readiness benchmarks. Funding amounts for this program range from a minimum of $3 million to a maximum of $15 million per project, with total awards not exceeding 60 percent of the total development cost. Funding is structured as deferred payment loans with long-term repayment obligations aligned with program guidelines. The program also includes strategic funding targets, such as allocating approximately 10 percent of funds to rural projects, and prioritizes projects based on criteria including service to lower-income households, readiness to proceed, cost containment, and funding efficiency. As illustrated in the scoring table on page 12, projects earn points based on the proportion of units serving extremely low-income households, reinforcing the program’s focus on deep affordability. The application process is streamlined compared to traditional funding rounds because applicants have already undergone prior review through earlier awards. Applicants may certify certain previously approved conditions rather than resubmitting full documentation, though updated financial and project information must still be provided. Applications must be submitted electronically through the Multifamily Finance Super NOFA portal by the stated deadline, and all required materials must be complete and accurate at the time of submission. The process includes underwriting review focused on financial feasibility, cash flow sustainability, and debt service coverage. Applications are evaluated through a competitive scoring and ranking process, with criteria including affordability levels, funding efficiency, readiness to proceed, and cost containment. Projects must achieve minimum threshold scores to be considered and are ranked based on total points until available funds are exhausted. The program does not partially fund projects; applicants must request amounts that can be fully awarded. Key dates include a release date of April 20, 2026, an application opening on May 4, 2026, a submission deadline of June 5, 2026, and anticipated award announcements in August 2026. Selected applicants must enter into formal agreements and comply with all reporting, legal, and regulatory requirements throughout the project lifecycle.

Demonstrate strong readiness to proceed including financing commitments; optimize cost per unit to improve scoring; ensure all prior HCD award conditions remain valid; carefully complete financial models for accuracy