Frederick considers $15 million revolving loan fund for affordable housing
HERE'S WHAT WE KNOW
Proposed starting size: $15 million Funding would come from municipal bonds. Loans could cover 15% to 30% of project costs. Repayments could be reused. Estimated annual bond payments: $1 million to $1.2 million. Estimated annual interest revenue: about $900,000. Additional city approvals would be required.
The City of Frederick is considering a $15 million revolving loan fund intended to help finance affordable housing development.
The proposal would have the city issue bonds, lend the proceeds to developers and then reuse repayments for future projects.
Ryan Trout, chief housing officer for the Coalition for Nonprofit Housing and Economic Development, presented the concept to the City Council’s Government Operations Committee.
Trout proposed a $15 million bond issue with a 20-year term. Based on Frederick’s AAA bond rating, he estimated annual debt payments of roughly $1 million to $1.2 million.
If the city lent the full $15 million at 6%, Trout estimated about $900,000 in annual interest revenue, leaving the city responsible for roughly $100,000 to $300,000 toward annual bond payments.
Loans could cover about 15% to 30% of individual project construction costs, and repaid money could then be lent to another development.
Trout cited Montgomery County as a model, saying its revolving housing fund has grown from $50 million to $100 million since 2021.
The proposal remains preliminary.
The suggested timeline calls for a feasibility study and enabling ordinance by June 2027, with bond issuance and lending potentially beginning later that year.
No $15 million bond issue has been approved.
WHAT IT MEANS
The idea is to create a pool of money that can finance multiple housing projects over time rather than provide one-time grants.
The proposal remains under consideration and has not yet been approved.
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