Rental Housing Works

​​​​The purpose of Rental Housing Works is to create jobs and strengthen the Maryland economy by providing gap financing for the creation and preservation of affordable rental housing financed through the Maryland Department of Housing and Community Development's Multifamily Bond Program and Low Income Housing Tax Credit Program.​


The Rental Housing Works is subordinate gap financing to be used solely for projects financed using the Maryland Department of Housing and Community Development’s Multifamily Bond Program and 4% Low Income Housing Tax Credits. Therefore, projects requesting Rental Housing Works funding must meet the requirements for both Multifamily Bond Program and Tax Credits, including those described in the Maryland Qualified Allocation Plan& and Multifamily Rental Financing Program Guide.

Rental Housing Works funding requests will be evaluated and processed in conjunction with the project’s Multifamily Bond Program and Tax Credit application. For Rental Housing Works projects also requesting other department sources of funding, such as Partnership Rental Housing Program, EmPOWER or other energy efficiency programs the projects must also meet the criteria for these additional funding sources.

Rental Housing Works Requirements

Rental Housing Works funding is governed by the laws (statutes, regulations and the Guide) applicable to the Multifamily Bond Program, with the following changes:

  • Rental Housing Works loans shall be subordinate loans with the terms and conditions described below and will be funded from State general obligation bonds and not the Community Development Administration bond proceeds.
  • Rental Housing Works loans must be used in conjunction with the Maryland Department of Housing and Community Development’s tax-exempt bonds and 4% Low Income Housing Tax Credits. Rental Housing Works applications should be submitted in conjunction with a Multifamily Bond Program application.
  • Rental Housing Works loans may not be used as cash collateral for short-term bonds.
  • Rental Housing Works loans are not subject to the requirements of the Multifamily Bond Program that are strictly applicable to the issuance of tax-exempt bonds.

Rental Housing Works applicants must satisfy the following additional threshold criteria:

  • Required zoning for use and density of development must be in place at the time of application and properly documented. A letter from the local zoning office would be proper documentation. An approved Planned Unit Development resolution or a local jurisdiction’s equivalent to a Planned Unit Development resolution satisfies this requirement. Development or site plan approval is not required at application. Conditional use or special exception approval also is not required at threshold and is up to the developer to obtain before closing.
  • The award of any competitive public and private sources of funding necessary for the project’s financial feasibility must have been made; and
  • The project’s projected Full Time Equivalent must be documented using the Full Time Equivalent Job Calculator.
  • The Board of Public Works must approve all Rental Housing Works funding awards because the source of the Rental Housing Works funding is general obligation bonds.

Requests For Funding

Applications for Rental Housing Works funds are accepted on an ongoing basis in conjunction with an application for the Multifamily Bond Program and 4% Low Income Housing Tax Credits.

Application Processing

  • Rental Housing Works applicants must submit a completed Application Submission Package (see Multifamily Housing Development Document Library) and provide the required threshold documentation, including the number of full time equivalent jobs created by the project. Full Time Equivalent per project will be determined using the department’s Resource Allocation Model. The Full Time Equivalent Job Calculator is available to determine Full Time Equivalent.
  • The department will track applications based on date of receipt.
  • Applications will be reviewed in conjunction with Multifamily Bond Program applications.
  • If the project does not meet the Rental Housing Works threshold criteria, the Rental Housing Works application shall be rejected and removed from processing, and the Applicant notified in writing.
  • The rejection notice shall state the reason the application has been rejected.
  • The Applicant may address the threshold issues and submit a new application, which will receive a new date of receipt.
  • Projects that pass threshold will be scored using the Evaluation Criteria in the Guide and must meet the scoring criteria for bond loans as outlined in the Guide.
  • Kick-off meetings will be scheduled for Multifamily Bond Program/Rental Housing Works projects after scoring is complete.
  • At the kick-off meeting, a timeline and critical path schedule will be distributed.
  • Projects must proceed in accordance with the agreed-upon schedule.
  • Projects that fail to meet processing timeframes or encounter financing gaps or other issues that affect threshold or financial feasibility may be withdrawn from processing until such problems are addressed.
  • Projects will be funded on a “first-ready, first served” basis.

Applicants should be aware that failure to meet processing timeframes and requirements for the Multifamily Bond Program, Rental Housing Works, and other necessary sources of funding for the project may affect the project’s ability to receive Rental Housing Works funding.

Limitations on Funding

The maximum amount of the State loans per project is $2.5 million. This limit does not apply to Partnership Rental Housing Program funds, Empower or other energy efficiency funding, or the assumption of existing department debt. The department may waive this maximum loan limit in accordance with Code of Maryland Regulations 05.05.02 and the Multifamily Rental Financing Program Guide. Generally, increases in the Rental Housing Works loan amount above the $2.5 million limit will be limited to circumstances addressing:

  • unexpected interest rate volatility affecting a project’s financial feasibility;
  • a need to balance various department resources, which may increase Rental Housing Works funding for a project with a corresponding decrease in another department funding source; ​or
  • the opportunity to support a project with significant economic impact and job creation.

Standard Loan terms

The Maryland Department of Housing and Community Development expects repayment of its Rental Housing Works loans on an amortizing basis from surplus cash and reserves the right to adjust loan terms based on its underwriting and subsidy layering reviews. It will generally provide Rental Housing Works loans under the following terms:

  • Loans will be provided with a 40 year term but will be due on sale, refinancing, any voluntary or involuntary transfer of the property or the occurrence of an event of default;
  • 2% simple interest will be charged; and
  • Payments to the department ​will be limited to 75% of annual cash flow.

Contingent Interest Loan Terms

The department has developed an alternate method of repayment of its Rental Housing Works loans as described below. The department reserves the right to adjust these loan terms based on its underwriting and subsidy layering reviews. The department will not apply these terms retroactively to Rental Housing Works loans approved and closed before the effective date of this updated Guidance. The project sponsor may choose whether to follow the alternate repayment method described below to repay its Rental Housing Works loan. This choice generally must occur prior to the department’s issuance of a commitment letter for the loan.

The alternative Rental Housing Works loan terms include the following provisions:

  • Loans will be provided with a 40 year term but will be due on sale, refinancing, and any voluntary or involuntary transfer of the property or the occurrence of an event of default.
  • 0% interest will be charged.
  • Repayment of principal shall be made from annual payments from surplus cash.
  • Once principal is repaid, contingent interest payments shall be made from surplus cash up to a specified maximum amount.
  • The Maryland Department of Housing and Community Development surplus cash splits will generally be between 50% and 75% of annual surplus cash, depending on outstanding deferred developer fees and soft debt participation by the local government.
    • Borrower’s surplus cash split will be a minimum of 25% and will range between 25% and 50%.
    • Local government surplus cash split will vary based on the amount and terms of the local capital contribution. If the local government’s capital contribution equals or exceeds $250,000 and is on the same or better terms than the department's loan terms, the local government will share cash flow proportionately with the department up to a maximum of 25%. If the local government’s capital contribution (share of soft debt) is greater than 60% of the project’s total public subordinate debt, the department will share the available surplus cash on a 50/50 basis with the local government.
    • A local government's note evidencing its loan shall be substantially in the same ​form as is used by CDA for its contingent interest surplus cash note.
    • Until deferred developer fees are paid, the department will take only 50% of surplus cash and the remaining surplus cash (portion not paid to local government) will be paid to the borrower.
    • The surplus cash payments to the department and the local governments will not be limited to the annual amounts which would be due had the loan been a fully amortizing loan and additional payments will be applied to the principal outstanding.
  • The Maryland Department of Housing and Community Development and local governments may require equity participation or contingent interest agreements with borrowers to share in the proceeds generated by the sale, refinancing or other disposition of assets of the project.

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