Community Development

Housing Development

The Department of Community Development offers resources in support of Affordable and Market Rate Housing Development through its Housing Development Office. These resources are available to all developers and neighborhoods and come in the form of soft loans, forgivable loans, and grants.  These funds can be used in support of multi-family rental projects and single-family for-sale projects.

Single-family Gap financing

This program is for projects that will include affordable housing units that will serve low-and moderate-income households. Market-rate projects which contain affordable units are eligible and encouraged. A limited amount of the City’s HUD HOME funds will be allocated through an annual RFP, which describes project eligibility, application requirements, and the format for submitting proposals. A limited amount of CDBG Funds (up to $1 million) may also be available for projects that include housing and would benefit from HUD’s CDBG regulatory requirements. The maximum contract amount is up to $40,000. 

The maximum contract amount is determined by project underwriting and subsidy layering guidelines for all HOME activities to determine the appropriate HOME investment. These guidelines require the examination of project sources and uses, cost and profit reasonableness, market demand, developer experience and capacity, and financial commitments. The City will forgive a portion of the Loan, not to exceed $30,000, in the amount the City determines is a gap between the final sales price of the Project Site to an approved homebuyer and the approved activity delivery costs, including an allowance for a developer fee, not to exceed ten percent (10%) calculated based on the direct construction.

Upon the sale of the Project Site, the Borrower must apply principal due to the City, in an amount not to exceed $10,000, against the agreed-upon sales price of the Project Site, as a homebuyer’s Second Mortgage, and have the Promissory Note, Second Mortgage Deed, and all other relevant Second Mortgage documents signed and recorded. The second mortgage amount is determined by the homebuyer’s income eligibility and the financing gap between the homebuyer’s first mortgage amount and the minimum homebuyer down payment of $500.

On Single Family Gap Financing Projects, the Borrower’s (Developer) Development Fee is not to exceed fifteen percent (15%) of the total project costs listed. The Development Fee is calculated on the total construction cost.
The Project must fully qualify as affordable housing, and therefore must satisfy the requirements of 24 CFR 92.254. Thus, among other requirements, the Property must be purchased by a homebuyer whose household qualifies as a low-income household which will maintain the Property as their principal residence throughout the affordability period. In order to maintain the Property as a principal residence, the buyer must reside at the Property at least 270 days per calendar year. The Borrower cannot earn a profit on the sale of the project site.

Construction Gap financing

A construction cost gap exists in many Cleveland neighborhoods. This “gap” is the difference between current market values and the development and construction costs for rehabilitation or new construction of modest quality housing. This Program focuses on single family for sale housing. All neighborhood housing types may be considered in an expanded program, with the understanding that single family values are tied to overall investment and market values in a neighborhood.

The Program Goal is to stimulate and sustain private construction investments in local housing markets. The intent of the program is to provide subsidy of up to $40,000 to a limited number of projects that produce quality housing and establish higher market values for new or renovated housing in a neighborhood. The program prioritizes projects that make a strong positive visual impact in a neighborhood. This visual impact will contribute to improved local market values and encourage additional investment.

Housing Trust Fund – Multi-Family Rental Program

This program supports housing development projects that will include affordable housing units that will serve low- and moderate-income households. Market-rate projects which contain affordable units are eligible and encouraged. A limited amount of the City’s HUD HOME funds  will be allocated through an annual RFP, which describes project eligibility, application requirements and the format for submitting proposals. A limited amount of CDBG Funds  may also be available for projects that include housing and would benefit from HUD’s CDBG regulatory requirements.

Model block

The Model Block initiative believes vacant building rehabilitation and existing owners’ investment in their building exterior will create community benefits. The Model Block program provides a source of public investment capital to remove blight and preserve neighborhood buildings in focused areas. The program itself provides grant funding for exterior repairs on the main structure of 1-4 unit residential properties. All individuals within the areas listed below are eligible for the program and can apply. The total grant amount will not exceed $25,000 and applicants may be required to provide match funding to support their project.

Pre-Development Consulting

The City of Cleveland welcomes new developers to the City and encourages their participation in our communities.  The City offers resources in support of various forms of market rate and affordable housing development in all neighborhoods.  These resources can be difficult to access for new or unfamiliar developers.  As such, the Department of Community Development will offer assistance and support to new developers seeking to use these funds.

Staff at the Department of Community Development can offer support in the following ways:

  • Explanation of City Programs and Regulations 
  • Evaluation of Project Financials
  • Evaluation of Building Plans and Design
  • Regular consultation to track project development