Community Housing Capital
Since its creation in 2000, Community Housing Capital (CHC), a CDFI and CDE with a national service area, has provided $955M in financing to 145 nonprofit housing developers to fund over 19,550 housing units with total development costs of $2.5B. A NeighborWorks America (NWA) affiliate, CHC’s mission is to expand the availability of quality, affordable housing by providing loan products and sustainable capital to the communities across the US served by NWA’s 245+ affordable housing developer members.
Introduced to Smith NMTC by NWA members who have worked with SNMTC on NMTC-funded affordable homeownership projects, CHC first partnered with Smith NMTC in 2019 to apply for an NMTC allocation in order to expand its product offerings to its affordable for-sale housing developer clients who were striving to increase their capacity, especially capacity for serving low-income and black buyers. CHC and Smith developed a targeted NMTC application strategy and conducted outreach to NWA members to build a robust pipeline of projects. CHC was awarded a $30 million NMTC allocation in September 2021 from its first application in 2020.
Employing Smith’s extensive expertise structuring multi-QALICB transactions, CHC deployed the full $30M allocation in a single closing with 5 QALICBs in February 2022. With allocation ranging from $5M to $7M, the developers will build a total of 111 homes in Georgia, Maryland, Minnesota, Texas, and Virginia. With the NMTC subsidy, the developers can bridge the affordability and market gaps, as needed. Each NWA nonprofit developer’s strategy is determined by stakeholder input and its intimate knowledge of the needs of the communities it serves and in which it is embedded. Click here to learn more about each project.
On the impact of these allocations, Cathy Williams, President and CEO of NeighborWorks Columbus shared, “It isn’t often that we, as a second city, have the opportunity to deploy tools like NMTC. We are, more often than not, overshadowed by the big markets. On behalf of my community, thank you for allowing us to be a part of this. We will use this tool to transform a long-neglected area of our community and assist families otherwise shut out from homeownership.”
NMTC allocation enables CHC to attract private-sector debt/investment capital to offer flexible, patient capital that its nonprofit developer clients cannot otherwise access. With Smith’s experience using NMTCs for affordable homeownership development projects, CHC can offer its clients lower than market rates and more favorable terms to ensure the success of these projects.
At least 20% of the homes created will be affordable for buyers earning at or below 80 percent AMI. Providing opportunity and access for low- and moderate-income buyers to afford homeownership creates immediate wealth and long-term intergenerational wealth opportunities for future generations, while simultaneously stabilizing communities by strengthening residential ties, removing blight and increasing tax revenues.
For the ongoing seven years of required reporting, the Smith NTMC team will manage the allocation, providing accounting and compliance support to CHC and its QALICBs and preparing and submitting all CDFI and Investor compliance documents and reports. Smith provides full oversight of expenditures and documentation, project location qualifications, and compliance with all statutory, administrative and Allocation Agreement requirements for the CDE. Working with QALICB staff, Smith also ensures that the benefits of the NMTC funds do not outweigh the administrative burdens, by assisting the QALICBs with all NMTC accounting and compliance documentation. Smith guarantees the recapture risk for CHC and the QALICBs.
AT A GLANCE
Total Allocation Award: $30M
Allocation Years: 2020
Total Transactions: 1
Total QALICB / NWA Members: 5
States served: 5
Number of homes: 111