Pre-Development Loan Program


The purpose of the Pre-Development Loan Program is to fund pre-development loans for 501(c)(3) Not-For-Profit organizations, as determined by the IRS, for projects located primarily in the New England states of Connecticut, Rhode Island, Massachusetts, New Hampshire, Maine, and Vermont to enable them to advance affordable and/or supportive housing projects with the use of loan funds. While preference is given to projects in New England states, other regions will be considered.


The specific term for each loan may vary, but, in general, small pre-development loans are available for a minimum term of six (6) to twelve (12) months and are renewable at the discretion of HMNE for a term not to exceed three (3) years. The term of large pre-development loans will be assessed on a project-by-project basis.

Eligible Borrowers

The only eligible borrowers are Not-For-Profits with a proven track record in the development of affordable and/or supportive housing. Organizations must have a solid balance sheet, experienced staff, and a Board that is active in the field of affordable housing.  The organization should also have: a successful track record in the receipt and use of public funds; three (3) years of strong audited financial statements; bank references; and all current Projects owned and operated by the entity must be in compliance with all applicable government codes and regulations. Please see our Guidelines for Funding page for more information on eligibility requirements.

Loan Collateral

Loan collateral, if any, is to be determined on a project-by-project basis.  For instance, if funds are used to acquire real property, the collateral will be the real property.

Maximum Small Loan Size

The maximum small loan amount is $50,000.00 per loan (maximum of one loan per not-for- profit organization). Loans must be for specific projects and loan proceeds shall be advanced as expenses are incurred.

Interest Rate

2023 Pre-development Loan Interest Rates
3-Year Term Sheet
Year 1: Prime -1%
Year 2: Prime -.5%
Year 3: Prime
Following Maturity: Prime +.25%

Due Diligence

HMNE will perform due diligence on both the Not-For-Profit entity and on the proposed Project, and the approval of a loan will be in HMNE’s sole discretion. Proposed Projects must be deemed feasible by HMNE in order to be approved. Feasibility will be determined based on the type of Project, status of site control, support from the community and local government, adequacy of market for proposed housing, design, zoning, availability of funding, and other applicable considerations.

Maximum Large Loan Size

The maximum large loan size is variable and shall be based upon the project, anticipated term of the loan, and current availability of funds available for lending. That said, large loans shall generally not exceed $1,500,000.00.

Potential Uses of Loan Funds

Loan funds may be used for all applicable development costs including site control costs, legal fees, design fees, zoning approval process expenses, appraisal/market study fees, environmental report fees, funding application fees and other affordable/supportive housing development related fees deemed appropriate.


The borrower shall be responsible for any direct costs that HMNE incurs to review the funding application and for the costs of any required due diligence and servicing of the loan, if the loan is funded. Any costs incurred by HMNE may be incorporated into the principal amount of the loan.

Application Process

The same application is used for both small and large loans and can be completed and can be completed by clicking on the link below. Applications that are received by the HMNE will first be reviewed for completeness of the information requested.  Collateral information and documents, including documentation to support the progress to date on the project, should be sent at the time that the application is submitted. Documents will not be returned unless otherwise specified and then will be returned at the applicant’s expense. The Loan Committee of HMNE Directors will complete the review of the application and, upon loan approval, issue funds. In some instances, the borrower may be requested to requisition funds based upon scheduled project expenses.

Download Application

If you have any questions about this loan program, please contact Leonard Gruenfeld via email at lg209@yahoo.com.