Supporting History

Revolving Loans Close Preservation Funding Gap

Originally published in Colorado History NOW, February 2006

Private individuals and for-profit property owners face long odds when applying for SHF grants because the competitive process favors projects with demonstrable public benefits. One way that private owners (and even homeowners associations) and/or for-profit entities may still participate in the grants program is through a unique combination of grants and loans.

In an effort to make more resources available for historic preservation, the Colorado Historical Foundation created the CHF Revolving Loan Fund. This new funding source provides grant recipients with low-interest rate loans. The Revolving Loan Fund developed from a unique partnership among three organizations—the State Historical Fund, the Colorado Housing and Finance Authority (CHFA), and the Colorado Historical Foundation (CHF). CHFA acts as the fiscal agent responsible for evaluating risk as well as closing and servicing all loans. CHF, which is responsible for the overall administration of the Loan Fund, is a private nonprofit organization that was established in 1965 to support history and preservation projects. While it usually supports projects of special interest to the Colorado Historical Society, the Foundation regularly assumes supporting roles for other history-oriented entities (such as SHF).

A CHF Revolving Loan has some unique characteristics that make it particularly appealing. It provides below-market fixed rate loans for up to five years for projects having an active or immediately pending State Historical Fund grant award contract. This grant/loan combination can be used to make noncompetitive—but nonetheless worthy—projects possible. Although there are no minimum or maximum loan amounts, loans of less than $100,000 or over $750,000 are considered only under unusual circumstances. Typically, the loans require minimal down payments, are structured with flexible repayment terms, and may be prepaid at any time without penalty.

Here’s how it works. A private owner teams up with an eligible SHF applicant, such as a local nonprofit historical society, to apply for a small grant for a preservation project. If the grant is awarded, the grant money could be used to cover the cost of a small item in the project’s scope of work, while the loan funds could be applied as a cash match to cover all of the other items. Or the loan might be used as a financial bridge covering cash shortfalls caused by a time lag between the project start date and the receipt of the grant funds.

As intended, the CHF Revolving Loan Fund has become a permanent and self-sufficient source of capital funds for historic preservation projects in Colorado. Between the loan fund, the State Historical Fund program, and the other sources of financial incentives available to owners of historic property, Coloradans are well equipped with the financial tools to meet any preservation challenge.

For more information on the CHF Revolving Loan Fund, contact Lane Ittelson at 303/894-2503 or email lane@cohf.org. Or contact an SHF outreach specialist at 303/866-2825 or visit the SHF pages on our web site.

BY RACHEL SIMPSON, SHF Outreach Specialist

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