Capital Magnet Fund
Graham Espley-Jones
Western Community Housing, Inc.
Agenda
1. Overview and Intent of the CMF
2. How Funds are Intended to Be Used
3. Six Types of Loan Programs Allowed
4. CMF Loan Criteria
5. Important Dates and Timing Considerations
6. Misc. Items to Consider
7. List of Awardees and Geographic Areas
• Non Profit (13)
• CDFI’s (10)
8. Closing Thoughts
Overview of the CMF
• The U.S. Department of the Treasury’s Community
Development Financial Institutions (CDFI) Fund in early
2010 offered an “Inaugural” NOFA to CDFIs and Non
Profits nationwide.
• Competing for an $80 Million pool of grant money to be
placed in affordable housing and related activities.
• $12 Million Maximum Award to any one Awardee
• Awardees were announced in October 2010.
• Assistance Agreements Negotiated for almost 1 year
• Funded in August 2011.
• Award Funds Restricted until CMF Goals attained.
Intent of Program
• Provide economic growth and stimulus in distressed
communities through a variety of lending practices at
favorable rates and non-traditional methods.
• To get assistance to low income families through
encouraging affordable housing activities in difficult to
develop areas and high need areas for the poor.
• This inaugural program allowed qualified non-profits to
receive awards from the CDFI Fund and lend to affordable
housing projects that otherwise would not proceed if it
were not for the favorable terms and conditions.
How Intended to be Used by Awardees
A. Affordable Housing Activities:
• Preservation
• Rehabilitation
• Purchase or development of affordable housing
• All of above low income families (80% or less)
and can be combined with…
B. Economic Dev. Activities or Community Service Facilities:
• Social Service Centers
• Charter Schools
(no more than 30% of funds can go into EDAs or CSFs)
Six Types of Loans Programs
1.
2.
3.
4.
5.
6.
To provide Loan Loss Reserves.
To capitalize an Affordable Housing Fund (WCH Choice).
To capitalize a Revolving Loan Fund (WCH Choice).
To capitalize a fund to support EDAs or CSFs.
To provide risk-sharing loans.
To support Loan Guarantees.
Note: Once funded awardees can elect to use funds for any one of the
above six by simply notifying the CFI Fund.
CMF Loan Criteria
Some variance based on what awardee put in application
• Loan Size: Amount to exceed 5% of CMF’s definition of
“Total Eligible Costs” of the project.
• Leverage: Loans leveraged at a factor of 10 times (usually
higher, which means the Awardee must re-loan the
money multiple times).
• Affordability: AMI targets to meet based on affordable
levels promised in the CMF application.
• NSP “High Need” Areas: HUD NSDP Map for Foreclosure
or Vacancy Factor.
• Total Eligible Costs – typically Land, Hard Costs, and Soft
Costs are eligible.
Timing
• Commitment Dates: For initial loans must be within 2 years
of the Award Date (for WCH – by August 2013).
• Construction Start: Within 12 months of the Commitment
Date, or
• Property Title: Must be transferred within six months of
the Commitment Date.
• Disbursement Date: One year after Commitment Date.
• Completion Date of Project is within 5 years of Award Date
(for WCH – by August 2018).
Other Items to Consider
• Environmental: 90 day environmental review period for
projects are required, unless borrower can show evidence
of an acceptable CMF “categorical exclusion” and Proposed
project does not involve actions that normally require an
Environmental Impact Statement (EIS).
• Covenant Agreement: Generally required for 15 years.
• Reporting: Reporting with on-going affordability
requirements to the CDFI Fund and FFATA-FSRS for 10 years
after the Investment Period (Typically total of 15 years).
• Terms: Terms are dictated by each CMF Awardee but
typically should be below market rates and can use “non
traditional methods” of lending.
Prohibited Uses
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Political Activities, Advocacy, or Lobbying
Counseling Services or Travel Expenses
Preparing or providing advice on tax returns
Emergency shelters
Nursing or Convalescent homes
Residential treatment facilities
Correctional Facilities
Student dormitories
Private golf courses
Massage parlor, hot tub or suntan facility
Gambling
Consist of Farming
Nonprofit CMF Awardees
Company Name/Territory
Amount
1. Western Community Housing (CA)
2. Abode Communities (CA)
3. Forward Community Investments (WI)
4. Great Lakes Capital Fund Nonprofit Housing
(MI, IN, IL, NY, WI)
5. Habitat for Humanity (GA, CA, FL, MI)
6. Northwest Real Estate Capital Corporation
(AK, MT, OR, UT, WA, WY)
7. Volunteers of America National Services
(AK, CO, FL, LA, OH, UT)
$5 Million
$4 Million
$3.8 Mil.
$4 Million
$4 Million
$500,000
$5 Million
Nonprofit CMF Awardees (continued)
Company Name/Territory
Amount
8. Massachusetts Housing Partnership (MA)
$4 Million
9. Pathstone Corporation (Puerto Rico)
$2 Million
10. South County Housing Corporation (CA)
$1 Million
11. Southwest Housing Solutions Corporation (MI) $4 Million
12. The Community Builders
$5 Million
(MA, DC, IL, IN, NY, OH, PA)
13. Women's Development Corporation (RI)
$1 Million
CDFI CMF Awardees
Company Name/Territory:
1. Century Housing Corporation(CA)
2. Enterprise Corporation of the Delta (HOPE)
(MS, AR, LA, TN)
3. Idaho-Nevada CDFI, Inc.(ID, NV)
4. Local Initiatives Support Corporation (LISC)
(NY, CA, IL, MA, MI, PA)
5. Low Income Investment Fund (LIIF)
(CA, CT, MA, NJ, NY, PA)
Amount
$5 Million
$4 Million
$2 Million
$5 Million
$6 Million
CDFI CMF Awardees (Cont.)
Company Name/Territory
6. New Hampshire Community Loan Fund (NH)
7. Ohio Capital Finance Corporation (OH, KY)
8. Rural Community Assistance Corporation (CA)
9. The Reinvestment Fund
(PA, MD, NJ, DC, DE)
10. San Carlos Housing Authority (AZ)
(Tribal-Designated Housing)
Amount
$3.7 Mil.
$5 Million
$2 Million
$5 Million
$1 Million
Conclusion
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Most Nonprofits will use for own developments
Keep an eye on important dates (Use it our lose it)
CDFI’s – Contact them ASAP
Pay attention to “High Need Areas” on NSP Maps
Website To Score your Site:
http://www.huduser.org/nspgis/nsp_map_by_state.html
• Click on the picture of the map and enter their property’s zip
code or census tract.
• If your Score for the Vacancy and Foreclosure is 18 or above
(20 is highest score) qualifies for the “High Need” area.
• This will be the most difficult for Awardees to place funds.