Established in 1992, the Housing Partnership Network, Inc. (HPN), a certified CDFI and CDE with a national service area, is a membership organization whose 100+ high-performing nonprofit community and affordable housing developer members serve low-income communities throughout the United States. HPN has helped its members develop, rehabilitate, or preserve 483,000 affordable homes, provide homeownership education and counseling to 1.3 million families and assist 13 million people through housing and community facilities and services.

Hearing of Smith NMTC’s work using NMTCs for affordable homeownership, HPN engaged Smith NMTC’s services in 2014 to pursue an NMTC allocation.  According to HPN's vice president of lending and investment, it was clear that NMTCs would be an extremely valuable tool to members doing single-family, for-sale development.

Working closely with HPN leadership, Smith NMTC prepared a successful NMTC application for the 2015-2016 allocation round. Working with Smith to develop its robust project pipeline, HPN targeted its outreach and intake process to all HPN members who developed for-sale housing in low-income communities. With its strong track record in real estate lending and asset management, and its targeted NMTC strategy designed to support struggling neighborhoods and low-income families, HPN received a $40 million allocation in that round.

Upon final project approval by the HPN Board, Smith NMTC facilitated three transactions between May 2017 and April 2018, deploying the full $40 million to six nonprofit affordable homeownership developer HPN members. With its affordable homeownership NMTC model, Smith structured the multi-QALICB transactions to maximize the net benefit for each organization, sharing transaction costs on a pro rata basis. As needed, Smith NMTC Associates assisted QALICBs to raise leverage by supporting communication with source lenders and related legal counsel.

In 2017 and again in 2019, HPN and Smith collaborated to submit more successful NMTC allocation applications, resulting in an additional $80M of NMTC allocation awarded to HPN. HPN deployed these allocations to a total of 11 HPN members in Florida, Georgia, Indiana, Louisiana, New Jersey, New Mexico, Texas and Vermont.

Since 2016, HPN has deployed the $120M in 19 QLICIs resulting in more than 700 for-sale homes within qualified census tracts, at least 185 of which will be sold to low-income persons with household incomes at or below 80% AMI. Two of the projects funded are part of a baseline impact study regarding affordable homeownership, with the goal to conduct a follow-up study in 3 to 5 years.

HPN’s NMTC funding enables its members to affordably build new, or acquire/rehab, and sell homes to low-income families and residents of low-income communities; to take back seller financing with more flexible underwriting standards than FHA; and to provide their buyers with pre-and post-purchase financial counseling, homeowner education, and high-touch loan servicing to ensure the best chance of success for their consumers. NMTCs are critical to HPN’s pipeline projects because subsidy is needed to address two primary causes of a funding  gap between cost to construct and sale price: (1) in some neighborhoods, the cost to acquire the property and build the home exceeds an affordable price; and (2) in some neighborhoods, and for some buyers, the market value is less than the project cost.  With NMTCs, the developers can subsidize the market gap and/or the affordability gap.

For the ongoing seven years of required reporting after closing, the Smith NTMC team provides thorough accounting and compliance support to both the nonprofit developer borrowers and to HPN. Working directly with QALICB staff, Smith ensures that QLICI expenditures are properly documented and that project addresses qualify under NMTC and Allocation Agreement requirements. Smith compiles all project data and anecdotal data for HPN, the investor and for CDFI Fund reporting. Smith guarantees the recapture risk for HPN and its members, and handles all CIIS reporting, and compliance reporting for investors and others.