DECATUR, Ga., Mar. 11, 2021 /PRNewswire-PRWeb/ -- On February 22, 2021, the US Treasury Department announced through the CDFI Fund that Community Housing Capital (CHC) was among 27 Community Development Financial Institutions (CDFIs) to receive an award from the 2020 Capital Magnet Fund (CMF). The CMF awards competitive grants to CDFIs and qualified nonprofit housing organizations to develop, rehabilitate, preserve, and purchase affordable housing, particularly housing targeted to low-, very low-, and extremely low-income families.
CHC will use the $2,500,000 grant to fund a pilot lending pool in Ohio, where thousands of homes are at risk of becoming unaffordable without intervention. Over 20 years, a group of nonprofit affordable housing developers, members of the NeighborWorks® network (NWOs), used the Low-Income Housing Tax Credit (LIHTC) program to acquire and rehabilitate scattered-site single-family homes. Many of these homes are reaching the end of their LIHTC income restrictions, and most require rehabilitation.
In 2018, the NeighborWorks Collaborative of Ohio (NCO) a coalition which includes prospective borrowers in our pipeline) approached CHC, asking the organization to create a lending product that would address a single-family and small multi-family financing gap with features that would allow NWOs to preserve affordable housing units and protect low-income occupants.
With competitive LIHTC options no longer available and mainstream banks typically requiring lower LTVs and higher interest rates for this asset class, NWOs face an insurmountable financing gap to preserve the affordability of these homes. CHC worked closely with the Ohio coalition to design a program to provide NWOs with up to 100% LTV acquisition/rehab financing to acquire the assets from old LIHTC partnerships, rehabilitate the properties, and preserve affordability for the current low-income residents.
"CHC worked closely with its Ohio customers and the NeighborWorks Collaborative of Ohio to structure the premise for this lending pool," said Cindy Holler, President and CEO of CHC. "The pilot program will allow single-family LIHTC partnerships to be unlocked and preserved – allowing some homes to move immediately to homeownership and others to be retained and preserved as affordable rental properties. Ohio NWOs own thousands of single-family homes in old, expiring LIHTC partnerships, and we are hopeful this pilot loan pool will attract attention and other capital to this exploding financing gap."
CHC has extensive knowledge in both the LIHTC program and the Y15 issues created for borrowers who use this program. This pilot loan product is a hybrid product which involves an underwriting and servicing knowledge of both asset classes and the preservation needs of both product types. Single-family lending by CHC averages $11.7 million per year and 70 units per year across the country. Multi-family lending by CHC averaged $72 million per year and 1100 units per year with 34.6 million being invested in small multi-family properties with 50 units or less.
"We are thrilled that CHC has been awarded funding from the Capital Magnet Fund to help us preserve affordable housing throughout Ohio's communities," said Nathan Minerd, Executive Director of NCO. "Through this partnership we will ensure that low-income Ohioans have access to an affordable home, the foundation of a thriving family."
About CHC
Community Housing Capital has, through its lending activity, created or preserved nearly 20,600 units of affordable housing and facilitated $2.7 billion in total development during its 21-year history. Community Housing Capital is headquartered in Decatur, Georgia. View Community Housing Capital's 20-Year Anniversary Report and for more information, visit https://www.communityhousingcapital.org
About the CDFI Fund's Capital Magnet Fund Award
The CDFI Fund's Capital Magnet Fund helps to create and preserve affordable housing for low-income families and economically distressed communities by attracting private capital. Through this program, the CDFI Fund seeks to promote activities in geographically diverse areas of economic distress, including metropolitan and rural areas across the United States. Awardees may finance activities in a single state or across several states. As of September 30, 2020, completed projects supported by CMF Awards have created 28,100 affordable units; 23,600 affordable rental units and 4,500 homeownership units. https://www.cdfifund.gov/
Media Contact
Cindy Holler, Community Housing Capital, +1 678 904 1305, [email protected]
SOURCE Community Housing Capital
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