Expressions of Interest (Phase I) are now being accepted until Wednesday, February 21, 2024. Program details, eligibility requirements and information on the application process are available in the backgrounder below.
On Wednesday, January 31st, 2024 – the Provincial Government announced it is seeking Expressions of Interest from Property Developers that are undertaking new purpose-built residential rental development projects in Newfoundland & Labrador. The program is part of the Provincial Government’s five-point plan designed to increase the availability of housing in Newfoundland & Labrador.
The Government of Newfoundland & Labrador’s Rental Housing Development Loan Program will offer low-interest loan financing to qualified property developers to encourage the construction of new rental housing. The aim of the program is to increase the availability of housing by incentivizing the construction of as many new units in the province as possible.
The Government of Newfoundland and Labrador will commit up to $50 million for the Program in eligible loans. The Rental Housing Development Loan Program will be delivered by the Innovation and Business Investment Corporation (IBIC), and administered by the Department of Industry, Energy and Technology, with funds awarded through a multi-phased solicited proposal process consisting of the following:
Phase I: Call for Expressions of Interest
Phase II: A Request for Proposal invitation to successful Expression of Interest applicants to provide an application with detailed proposal, and
Phase III: Award and signing of funding agreements with successful Applicants.
BACKGROUNDER: Rental Housing Development Loan Program
Qualifying projects under the RHDLP must meet the following criteria:
· Projects must have at least four units;
· Projects must pertain to purpose-built rental housing units (including modular homes) or the conversion of non-residential buildings into rental housing units;
· Project costs must pertain to the construction, engineering and architecture of the housing property; and
· Prospective tenants must be unrelated and unaffiliated to the property developer.
Eligible applicants must meet the following criteria:
· Have previous experience as a residential project developer or contractor (at least five years);
· Be incorporated or other registered entities in the Province of Newfoundland and Labrador;
· Be in good standing with the Province of Newfoundland and Labrador; and
· Pledge security as collateral for a loan up to the amount requested by means including, but not necessarily limited to:
o First collateral mortgages
o Promissory note;
o Personal guarantees of the business owners; and/or
o Cross-corporate guarantees.
Eligible Applicants who have applied for and received, or who have an application actively under consideration, for financial assistance from the Government of Newfoundland and Labrador or its entities (e.g., Newfoundland and Labrador Housing Corporation) for the same proposed Project, will not be eligible for this Program.
· RHDLP loan financing may not exceed 90 per cent of the Eligible Project costs of each development, to a maximum loan amount of $10 million for a single development project.
· Interest rates will be applied as follows:
o Government of Newfoundland and Labrador borrowing rate at the date of loan acceptance (4.7 per cent as of January 19, 2024) for the first $6 million requested in RHDLP financing.
o Bank prime rate at the date of loan acceptance (currently this rate is 7.2 per cent), for any amount of requested RHDLP financing that exceeds $6 million, up to the maximum loan amount of $10 million.
Loans will bear interest at the qualifying fixed rate for a term of ten years with a loan amortization period of 25 years.
Loans will have an interest-only payment period until the completion of construction.
An advance payment of 20 per cent of eligible project costs will be provided upon the signing of a financing agreement for use for pre-construction project costs. Three subsequent tranches of funding will be provided in accordance with the start and progress of construction, for a total of four payments of approved financing.
Submitting the Expression of Interest
There is no application fee to apply for RHDLP funding. Proponents may submit multiple projects for consideration, up to a maximum of three, but each project must be submitted as an individual Expression of Interest. Completed Expressions of Interest should be forwarded by close of business (4:30 P.M. Newfoundland and Labrador Time) February 21, 2024, via email in PDF format to: RHDLP@gov.nl.ca.
Any questions related to this call for Expressions of Interest should be submitted in writing to RHDLP@gov.nl.ca on or before February 8, 2024.