Funding gap & strategy
Private and CDFI capital first, then state and federal programs, then a targeted BDC request. Hard money is only a bridge.
| Step (Phase 2) | Amount |
|---|---|
| Total Phase 2 uses | $6,166,023 |
| Less: NIIF loan, sponsor cash, 1818 land, deferred fee | −$3,296,149 |
| Gap before any public source | $2,869,874 |
| Less: 2027 bond bill, historic tax credit equity, BDC façade grants | −$1,426,000 |
| Gap after Priority 2 | $1,443,874 |
| Less: BRNI FY2029, Strategic Demolition Fund, Community Legacy | −$500,000 |
| Remaining gap — BDC / City request | $943,874 |
Why a gap exists
Phase 2 costs $6,166,023, but the buildings will be worth $3,405,893 once stabilized, and the project-level return is 0.6%. Restoring historic buildings on this block costs more than conventional capital can carry. The public investment delivers 18 homes, 4 storefronts and a restored landmark.
Ranked strategy
- Priority 1 — private & CDFI: NIIF senior loan, $200k sponsor cash, 1818 land equity ($150k), 50% developer-fee deferral.
- Priority 2 — bond bill: a $500,000 request in the 2027 session through District 40. Application due 11/23/2026; funds available after 6/1/2027. The 2025 session awarded LLAYD $250k.
- Priority 2 — historic tax credits: federal 20% and the MHT Competitive credit on $2,576,470 of qualified rehab. Part 2 approval comes before work. Fallback: the MHT Small Commercial credit ($50k cap).
- Priority 2 — BDC façade grants: two Rehabilitation FIGs at $25k each (1:1 match).
- Priority 3 — DHCD grants through Central Baltimore Partnership: BRNI FY2029, Strategic Demolition Fund / C.O.R.E., Community Legacy.
- Priority 4 — BDC request: $943,874, preferably a deferred subordinate loan repaid at refinance or sale. It shrinks dollar-for-dollar if other awards come in higher.
Additional levers
- DHCD Small Business Lending Program: 4% fixed, up to $2M, for the commercial component. The current round closes 9/17/2026.
- Opportunity Zone equity: tract 1205 stays on the current map through 2028.
- CBP funds: CBFF Strategic Acquisition & Predevelopment Fund and the Neil Muldrow Small Business Fund.
- MHT Historic Preservation Loan Fund.
- Furniture leasing/financing for the FF&E package, or a $150/mo furnished amenity fee.
- More fee deferral, value engineering, and a shift toward 2BR units.
Timing bridge & last-resort hard money
The preferred bridge is an NIIF bridge loan at 5% secured by grant and credit pledges. Strategic hard money (~12% + 2.5 points) is a last resort: bridging $2,869,874 for 24 months would cost about $760,517.
Not sources of funds
The CHAP 10-year credit (100% of the City tax on the assessment increase) is modeled as an operating-expense reduction of $43,553/yr. The January Exhibit D had listed it as a source. Enterprise Zone and HPTC credits cannot be combined with CHAP at this scale.