This unique program utilizes a self-leveraged model (NMTC Housing Model) that helps affordable for-sale housing developers increase development capacity using New Markets Tax Credits. Since 2008, Smith has structured and facilitated 23 closings with 13 different Community Development Entities (CDEs) totaling $288 million. The Capacity Building Program has helped 82 nonprofit borrowers finance 3,165 affordable, single-family homes in 30 states. To make NMTC funding accessible to smaller for-sale affordable housing developers (borrowers), Smith bundles multiple borrowers in a single transaction, thereby increasing their net benefit and reducing their costs. To help borrowers successfully navigate the complex world of NMTCs, Smith provides customized training, ongoing support and expertise and other New Markets Tax Credit Services. The end result is more homes, increased community engagement and enhanced stability in some of the country’s most underserved areas.
The Sustainable Homeownership program combines the proven NMTC Housing Model with a securitized bank fund designed to attract Community Redevelopment Act (CRA)-motivated lenders who are seeking risk-weighted, capital-enhanced returns through a NMTC/CRA Housing Model. This program dramatically multiplies the dollars invested and resulting impact in low-income communities hit hardest by the foreclosure crisis. In a climate where mortgage lending is increasingly difficult to obtain, the Sustainable Homeownership Program provides affordable for-sale housing developers the funding and tools to make homeownership opportunities available to an entire segment of the community that is currently locked out of the mortgage market. The innovative funding approach of the NMTC/CRA Housing Model provides developers with favorable rates and terms, as well as limited risk through Smith NMTC’s recapture risk management services. This enables the developers to provide affordable financing to low-income homeowners accompanied by homeowner education, pre-and post-purchase financial counseling and high-touch loan servicing in a program designed to help these new homeowners succeed, and to create sustained benefits for the community as a whole. Smith NMTC provides New Markets Tax Credit Services and Project Specific Services to make this program possible.
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