Capital Magnet Fund

Graham Espley-JonesWestern Community Housing, Inc.

Agenda

1.Overview and Intent of the CMF2.How Funds are Intended to Be Used3.Six Types of Loan Programs Allowed4.CMF Loan Criteria5.Important Dates and Timing Considerations6.Misc. Items to Consider7.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 •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

•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) $5 Million2. Abode Communities (CA) $4 Million3. Forward Community Investments (WI) $3.8 Mil.4. Great Lakes Capital Fund Nonprofit Housing $4 Million (MI, IN, IL, NY, WI)5. Habitat for Humanity (GA, CA, FL, MI) $4 Million6. Northwest Real Estate Capital Corporation $500,000 (AK, MT, OR, UT, WA, WY)7. Volunteers of America National Services $5 Million (AK, CO, FL, LA, OH, UT)

Nonprofit CMF Awardees (continued)

Company Name/Territory Amount

8. Massachusetts Housing Partnership (MA) $4 Million9. Pathstone Corporation (Puerto Rico) $2 Million10. South County Housing Corporation (CA) $1 Million11. Southwest Housing Solutions Corporation (MI) $4 Million12. 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: Amount

1. Century Housing Corporation(CA) $5 Million2. Enterprise Corporation of the Delta (HOPE) $4 Million (MS, AR, LA, TN)3. Idaho-Nevada CDFI, Inc.(ID, NV) $2 Million4. Local Initiatives Support Corporation (LISC) $5 Million (NY, CA, IL, MA, MI, PA) 5. Low Income Investment Fund (LIIF) $6 Million (CA, CT, MA, NJ, NY, PA)

CDFI CMF Awardees (Cont.)

Company Name/Territory Amount

6. New Hampshire Community Loan Fund (NH) $3.7 Mil.7. Ohio Capital Finance Corporation (OH, KY) $5 Million8. Rural Community Assistance Corporation (CA) $2 Million9. The Reinvestment Fund $5 Million (PA, MD, NJ, DC, DE)10. San Carlos Housing Authority (AZ) $1 Million (Tribal-Designated Housing)

Conclusion

•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.