This Just In ...
OCC’s Four Districts Report on New Opportunities for Banks

Western District

Early-Stage Financing for Habitat for Humanity

The Mile High Community Loan Fund (MHCLF), a Denver-based Community Development Financial Institution (CDFI), and Habitat for Humanity Colorado (HFHC) have joined forces to fund the early-stage financing needs of Habitat for Humanity affiliates across Colorado. This partnership works in part because both MHCLF and HFHC share a mission of providing affordable housing for low- and moderate-income families.

This unique arrangement addresses timing issues faced by many Habitat for Humanity affiliates involved with financing real estate development projects, by offering them predevelopment, acquisition, construction, and mini-perm loans.

The Wells Fargo Community Development Corporation enabled this partnership by agreeing to fund a loan request by HFHC. In essence, HFHC re-lends these funds to its Colorado Habitat for Humanity affiliates. The Wells Fargo loan was structured as a five-year, low-interest subordinated note to HFHC. Subsequently, HFHC entered into a Memorandum of Understanding (MOU) with MHCLF, an expert in community development lending, to help it implement and manage this new loan fund program.

Under the MOU, MHCLF underwrites loan requests from Habitat for Humanity affiliates and then presents the loans to MHCLF’s Loan Committee along with recommendations. HFHC makes the final credit decision but takes advantage of MHCLF’s loan policies, product terms, credit infrastructure, and capacity to manage the program. If the loan is approved by HFHC, MHCLF then schedules a loan closing and services the loan on behalf of HFHC.

The two organizations work together to market the program to Habitat for Humanity affiliates and provide technical assistance to potential borrowers. In addition, on a case-by-case basis MHCLF also participates in loans, further leveraging funds and helping to mitigate risk. In 2010, HFHC and MHCLF made three loans totaling $360,000 to Habitat for Humanity affiliates for land acquisition, resulting in 12 units.

For more information regarding this program, e-mail Jeff Seifried, or call (303) 860-1888, ext. 5.

Southern District

Funding for Small Businesses in Arkansas

ACCG Lending, headquartered in Little Rock, Arkansas, is a group of small-business lending companies working together to assist small-business owners and their community banks with long-term financing options and risk-mitigation tools. ACCG Lending comprises the Arkansas Capital Corporation (ACC), the Six Bridges Capital Corporation (6BCC), and the Arkansas Capital Relending Corporation (ACRC).

Founded in 1957, the ACC has helped launch new economic development opportunities for businesses across the state. Since its inception, the family of companies has provided more than $385 million in capital to small businesses in Arkansas. As an SBA and USDA Preferred Lender, ACC partners with numerous sources to mitigate the risks associated with providing capital to businesses. In 2002, ACC established the Heartland Renaissance Fund, a designated Community Development Entity (CDE) that is active in the New Markets Tax Credit industry and has received three allocation awards (totaling $140 million) from the U.S. Department of the Treasury. Qualified investments into designated CDEs such as the Heartland Renaissance Fund provide investors with federal tax credit opportunities and provide capital to further spur economic development within federally designated low-income areas.

6BCC, established in 1989, is a statewide provider of Small Business Administration 504 loans. Through the use of long-term financing, 6BCC encourages economic development by giving small businesses the opportunity to acquire major fixed assets for expansion or modernization. The program’s low down-payment requirements contribute to more operating cash available for operations of the small business.

In 1998, ACCG Lending created the ACRC as another financing tool to promote economic development and strengthen communities. In 2010, the ACRC was designated as a Community Development Financial Institution, allowing it to pursue federal grants or other low-cost sources of capital, which are then deployed in underserved markets across the state.

For more information on investment and lending opportunities, and on how your bank can partner with ACCG Lending, contact C. Sam Walls, chief executive officer, at (800) 216-7237, or visit the ACCG Lending Web site.

Northeastern District

Bank and Community Partners Increase Opportunities for Charter Schools

Three new charter school financing programs have recently been announced.

• JPMorgan Chase plans to partner with community organizations to help stimulate the growth of charter schools. Chase will provide much-needed financing for the development of school facilities by partnering with nonprofit community organizations such as the Reinvestment Fund (TRF), of Philadelphia, Pennsylvania; the Low Income Investment Fund (LIIF), of San Francisco, California; and NCB Capital Impact, of Arlington, Virginia. The initiative combines grants, debt financing, and New Markets Tax Credits (NMTC) to enable charter schools to acquire and improve facilities. Of the $325 million committed by Chase, $50 million will be in grants to Community Development Financial Institutions (CDFIs) active in funding charter school projects. The CDFIs can then use the grants as permanent equity and leverage the money to fund high-performing charter schools. Approximately $175 million in debt and $100 million in NMTCs also will be allocated for charter school facility projects.
• NCB Capital Impact has created an $80 million fund to support charter schools around the country. In December 2010, the Alliance for College-Ready Public Schools, a California charter school network, was the first loan fund recipient. The financing is helping Alliance open a new high school for 550 students.
• TRF is providing $50 million to finance real estate projects for established charter schools that are acquiring, renovating, or expanding facilities. The projects will be located in TRF’s footprint—Pennsylvania, New Jersey, Maryland, Delaware, and Washington, D.C.—and will meet eligibility requirements for the NMTC Program.

To learn more about these partnerships and other opportunities, visit the JPMorgan Chase, NCB Capital Impact, and TRF Web sites.

Central District

New Ohio CDFI Promotes Economic Revitalization

The Finance Fund Capital Corporation, a statewide Community Development Financial Institution and the lending arm of the Finance Fund, promotes economic revitalization and community development in low-income communities by providing access to capital, facilitating investment, and financing opportunities throughout Ohio. To that end, its Community Investment Fund (CIF) provides financing for projects such as affordable housing and community facilities (a category that includes charter schools, community centers, and health clinics).

An investment commitment to the CIF has the potential to benefit the investor with a competitive return on investment, a Community Reinvestment Act credit-eligible investment, and Bank Enterprise Award eligibility. Such investments achieve significant community impact throughout Ohio’s urban and rural communities. The terms of the fund are designed to provide a tailored program that fits all the investor’s needs for community investing. Investment amounts can be as low as $250,000 for investment in a pooled loan fund or more than $1 million for a private loan fund. Terms range from five to seven years, and the investment offer is secured by business assets.

For more information, e-mail Valerie Heiby, Director of Development at the Finance Fund Capital Corporation, or call (614) 568-5055.