This Just In ...
OCC's District Community Affairs Officers' Report

Western District

Supporting Bond Financing in Rural Nebraska

The Nebraska Investment Finance Authority (NIFA) provides a broad range of financial resources for homeownership, rental housing, agriculture, manufacturing, medical services, community services, and community development. Through its Development Financing program, NIFA provides technical assistance to project participants to support financing through tax-exempt issuers, such as NIFA and Nebraska counties and cities.

Tax-exempt issuers have the authority to issue revenue bonds or other debt instruments, such as industrial development bonds, to raise funds used to finance eligible development projects. Bonds must meet certain federal and state law requirements allowing the interest they bear to be exempt from federal and state income taxes. The bond issues are repaid from the proceeds received by the issuer from the borrower under a revenue agreement, lease agreement, loan agreement, or installment sale contract.

Like all states with large rural areas, Nebraska has many distressed and underserved, nonmetropolitan, middle-income census tracts. Support for projects in these rural, middle-income census tracts or low- and moderate-income census tracts funded by public bond issues or other debt instruments may meet the definition of community development in the Community Reinvestment Act (CRA).

The Development Financing program offers technical assistance to borrowers seeking bond financing. Borrowers find their own lenders or bond purchasers either by direct placement with a financial institution or through a public sale using an investment banker. Interest rates are negotiated between the borrower and lender/investment banker. Generally, the maximum bond amount is $10 million, unless the project qualifies as an "exempt facility," such as solid waste facilities, nonprofit hospitals, or nonprofit nursing homes. For more information, contact Steve Clements, NIFA Chief Financial Officer, or call him at (402) 434-3908.

Los Angeles County Housing Innovation Fund

In 2006, the Los Angeles County Board of Supervisors allocated $60 million to the Los Angeles County Housing Innovation Fund (LACHIF) as part of the county's Homeless Prevention Initiative. LACHIF's investors include the county, philanthropic organizations, national financial institutions, and nonprofit organizations. The Corporation for Supportive Housing (CSH), a national intermediary that provides permanent affordable housing and flexible supportive services, is the lead administrator for the LACHIF. In June 2008, in order to allow smaller banks to participate in the program, LACHIF set aside a portion of the funds with a reduced minimum investment of $250,000. The investments mature in 10 years and yield two percent.

CSH and Wells Fargo (an investor in the fund) are providing underwriting, documentation, and reporting to participating financial institutions. CSH will underwrite acquisition and predevelopment loans for supportive housing projects using the monies in the fund. Although the first fund has closed, other funds will be considered in the future. E-mail Ruth Teague of CSH for more information.

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Southern District

Housing Advocacy and Financing in Atlanta

Atlanta Neighborhood Development Partnership, a housing advocacy organization with a mission to promote the development of mixed-income communities, operates an $11 million loan fund called the Community Redevelopment Loan and Investment Fund (CRLIF). The first nonprofit in Atlanta to receive community development financial institution (CDFI) certification, CRLIF provides financing to community development corporations, which are nonprofit and for-profit housing developers that create affordable housing, mixed-income, and mixed-use properties.

CRLIF is designated as a U.S. Treasury Certified Development Entity (CDE), an officially recognized entity that has a primary mission of providing investment capital for low-income communities. To improve access to capital for community redevelopment, CRLIF offers a variety of lending products, including acquisition, predevelopment, construction, and bridge loans as well as lines of credit. Additionally, borrowers may choose to create a custom loan package combining two or more of these products.

One of CRLIF's highest priorities is to expand its loan fund to meet capital needs related to the foreclosure crisis. In metropolitan Atlanta one out of every 91 homes is facing foreclosure. To address this issue, CRLIF is increasing its fund to support acquisition/rehabilitation programs of area nonprofits to help them preserve neighborhoods affected by a high number of foreclosures.

CRLIF is supported by local, regional, and national financial institutions. For more information, contact K.C. George at (404) 420-1608, or visit CRLIF's Web site.

Louisiana Initiative Promotes Adult Literacy

Adult illiteracy continues to be an urgent and growing problem in America. To help combat the issue in southeast Louisiana, the Volunteer Instructors Teaching Adults, Inc., (VITA) is actively working to help adult learners develop the literacy skills needed to further their education and to reach their full potential. As a nonprofit adult literacy agency, VITA has provided one-to-one and small group literacy instructions since 1982, serving Lafayette, St. Landry, Iberia, Vermilion, and St. Martin Parishes. VITA offers several programs, each designed to provide educational services for individuals 17 years of age and older with less than a high school education who desire to improve their reading skills or English proficiency. In addition to improving basic educational skills, VITA programs incorporate survival and life skills, including promoting financial independence and self sufficiency.

VITA also maintains technology and resource centers fully equipped with computer hardware and software for instructions in basic reading skills development related to the attainment of workplace foundation skills. In addition, VITA recruits bank employees to serve as instructors in the computer lab and teach financial literacy mini-courses on such topics as "How to Open a Bank Account," and "Checking vs. Money Orders." They also provide counseling on home mortgages, investments, and auto loans.

VITA is seeking to expand its partnerships with financial institutions by securing volunteer instructors and funding to support its ongoing programs. Bank employees who serve as volunteer tutors or instructors enable VITA to reach more adults and to devote its limited resources to other agency needs. For more information on the work of Volunteer Instructors Teaching Adults, Inc., and its core programs, go to its Web site.

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Northeastern District

Supporting Affordable Housing through Tax Credit Syndication

Community Affordable Housing Equity Corp (CAHEC) is a 501(c)(3) nonprofit low-income housing tax credit syndicator serving Alabama, the District of Columbia, Florida, Georgia, Kentucky, Maryland, North Carolina, South Carolina, Tennessee, Virginia, and West Virginia. CAHEC works to create and maintain affordable rental and ownership housing in the areas it serves. Since its creation in 1992, CAHEC has developed more than 7,300 units of affordable housing. CAHEC also provides a number of supportive programs designed to assist the residents of the developments it has helped to finance.

As a tax credit syndicator, CAHEC structures equity funds using investors' capital. CAHEC's most recent fund is the South Carolina Preservation Fund II LP (SCPF II). SCPF II is a $32 million equity fund designed to preserve and renovate a portfolio of older, multifamily housing properties in South Carolina. The targeted portfolio includes 41 properties with a total of 1,548 units. Although all investments in SCPF II were fully subscribed in 2008, banks can invest in other CAHEC equity funds as they are developed. To learn more, visit their Web site or e-mail Dana Boole or call (919) 788-1803.

Grameen America Reaches the Microenterprises and Unbanked in New York City

Grameen America has brought to New York City the group lending and savings model successfully developed and refined in Bangladesh during the last 30 years. Grameen Bank and its creator, Professor Muhammad Yunus, jointly received the 2006 Nobel Peace Prize based on the success of the microfinance model. The bank provides loans, savings programs, remittance services, and other training to its borrowers. The small loans help Grameen America's customers start and grow microenterprises. Typical customers are low-income individuals who are unbanked and lack access to mainstream credit sources.

In November 2007, Grameen America opened the first pilot office in the United States in Queens, New York. There are plans to open additional New York locations over the next few years. The types of businesses funded through the Queens location include cosmetology, pet grooming, day care, clothing, jewelry, and food sales.

In the Grameen group model, prospective borrowers form groups comprised of five individuals. To build financial resources, all borrowers are required to save money when they receive loans. The group meets periodically to help educate borrowers on financial issues. This borrower education, combined with the savings requirement, encourages loan repayment.

In 2008, Grameen America provided 380 borrowers with more than $1 million in loans. Loans range from $500 to $3,000 for a term of 6 to 12 months. The interest rate charged is 15 percent, which is less than some alternative financing options that these borrowers previously used because of their lack of credit history.

Initially, Grameen America was funded by grants, private contributions, and loans. Its goal is to become a self-sustaining entity.

For further information, visit Grameen America's Web site.

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Central District

Development Financing for Affordable Housing in North Dakota

CommunityWorks North Dakota (CWND) is a 13-year-old, award-winning, nonprofit affiliate of NeighborWorks America that provides financing for affordable housing in North Dakota. Persons can obtain home purchase loans, home rehabilitation and emergency repair loans, and downpayment assistance from the DREAM Fund of CWND. Since the lending program began in 2001, CWND has provided more than $16 million in financing to borrowers in nearly every county in North Dakota. Two-thirds of CWND borrowers are within low- to moderate-income brackets and more than 95 percent are referred to CWND by banks. Approximately 50 banks participate as contributors and investors in the DREAM Fund, including some of the largest financial institutions in the country and many community banks.

CWND also develops affordable housing. It currently is at work on its third project, which is partially financed with low-income housing tax credits. In recognition of all of this work, the North Dakota Housing Finance Agency has honored CWND three times with its "Champion of Affordable Housing" award. CWND, a certified Community Development Financial Institution through the CDFI Fund of the U.S. Department of the Treasury, is forming a new loan fund that will provide pre-development financing to nonprofit organizations, to for-profit developers, and to municipalities for the development of affordable single-family homes and multifamily projects. Investors in this new fund include utility companies, foundations, government agencies, and financial institutions. Banks can be involved in CWND by referring prospective borrowers, providing grant funding, and serving on the governing board and other committees of CWND. For more information, visit CWND's Web site, e-mail Executive Director Paul Rechlin, or call him at (701) 255-4591.

Financial Education for Indianapolis Families

The Indianapolis Neighborhood Housing Partnership (INHP) is a 20-year-old nonprofit with a mission to "increase safe, decent, affordable housing opportunities that foster healthy, viable neighborhoods." To that end, INHP offers tools that empower low- and moderate- income families to become long-term, successful homeowners, including: education, one-on-one mortgage and credit counseling, special INHP lending products, referrals to lender partners, lending guidance, and post-purchase counseling. Individuals and families who complete INHP programs and become properly prepared homeowners are the seeds to strengthen Indianapolis neighborhoods.

While INHP, historically, has maintained its core programs, the nonprofit continues to study its data and changes in the affordable housing market, responding to changes and opportunities to develop programs and partnerships that address new needs. Currently, INHP is in a pilot phase of a unique comprehensive economic security program offering certified financial planning services. These services are designed to help INHP clients take the next step, after homeownership, to create long-term financial plans. Other programs, such as employer-based education (INHP takes its curriculum to area employers to educate employees on-site), are also a result of INHP's ability to remain nimble, while focused on its mission. For more information, contact Moira Carlstedt at (317) 610-HOME (4663) or visit INHP's Web site.