Community Developments Investments
Community Developments Investments Community Developments Investments Community Developments Investments
Community Developments Investments

summer 2004

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This Just In...OCC's Districts
Report on Investment Opportunities for Banks

Northeastern District Image

Northeastern District

John Farrell (617) 482-1643
Denise Kirk-Murray (212) 790-4053



National Association of Seed and Venture Fund’s Capital Formation Research

The Capital Formation Institute (CFI) is a new nonprofit organization dedicated to research in early-stage capital formation and enterprise creation. The CFI’s mission is to become the premier international research and educational entity in the fields of early stage capital financing and enterprise creation and growth. The organization will manage research projects, conduct surveys, sponsor conferences and seminars, and produce publications. A research advisory board has been created to set research priorities, review research proposals, and oversee research projects. It is composed of early-stage capital investors, researchers, and business creation experts. The first research project will be a survey of public and private early-stage capital funds.

CFI is affiliated with the National Association of Seed and Venture Funds (NASVF). NASVF is an organization of public, private, and nonprofit organizations committed to building their local economies by investing and facilitating investment in local entrepreneurs. NASVF maintains a listing of venture funds on its Web site at www.nasvf.org.

Baltimore Redevelopment Efforts Get $50 Million Boost

Harbor Bankshares Corporation recently received a $50 million new markets tax credit allocation to enhance community development loan funds supporting revitalization and reinvestment in the city of Baltimore. The new investment funds will benefit both affordable housing development and small business financing, including a partnership with Fannie Mae to construct owner-occupied housing in targeted low-income communities and a commercial loan fund to help finance large scale mixed-use projects. Harbor Bankshares indicates that the flexibility of the tax credit program will allow it to expand its product mix to include loans with longer amortization periods, longer interest-only periods, and higher loan-to-value ratios. For more information, contact William Rice of Harbor Bankshares at (410) 675-5722.

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Central District Image

Central District

Paul Ginger (312) 360-8876
Norma Polanco (216) 447-8866


Entrepreneurs Access Vital Funding in Lansing

Did you know that micro-enterprises account for 15.8 percent of all employment in Michigan­–an estimated total of 864,000 people? The Lansing Community Micro-Enterprise Fund (LCMF) offers a revolving loan fund to entrepreneurs that are unable to qualify for traditional bank loans. Loans range from $500 to $10,000, and 98 percent of the recipients have been minority-owned businesses. LCMF provides technical assistance, one-on-one, and also offers an entrepreneurship course. To qualify for a loan through the revolving loan fund, applicants must have completed a formal business plan, meet income eligibility guidelines, have a business that will benefit a low- or moderate-income neighborhood, and have no unsettled judgments or collections. LCMF also works closely with the local Small Business Administration (SBA) office to make SBA 504 loans and CommunityExpress loans. LCMF is seeking additional financial institutions to invest in its revolving loan fund, through below market rate, low interest rate loans, as well as lenders to refer entrepreneurs for SBA 504 loans. Contact: Denise Peek, (517) 485-4446, lancomme@tir.com.

Illinois Facilities Fund Capitalizing $100 Million Loan Program

The Illinois Facilities Fund (IFF) is a nonprofit certified Community Development Financial Institution that provides loans, facilities planning, and development expertise to Illinois nonprofits for facility acquisition and improvements, new construction, and working capital and pre-development purposes. IFF’s borrowers are nonprofit organizations serving low-income communities and special needs groups throughout Illinois, such as child care centers, health care clinics, charter schools, homeless and transitional shelters, and affordable housing developers. Investors in the IFF loan program include ten banks, nine foundations, the state of Illinois, and a number of persons through the IFF’s Community Investor Fund. IFF now is raising $100 million of new capital over five years to continue its lending program. Structured as collateral trust notes with a 15-year term that will be issued semi-annually by IFF, proceeds from the notes will be used to purchase real estate and facilities-related loans made by IFF to nonprofit organizations in Illinois. Banks can be involved as investors in the IFF loan program, can be co-lenders with IFF, can refer prospective borrowers to IFF, and can provide grant funding to support IFF’s operations. Contact Trinita Logue at (312) 629-0060 or tlogue@iffund.org; http://www.iff.org

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Southern District Image

Southern District

Karol Klim (770) 396-3320 x252
David Lewis (214) 720-7027



Third Coast Community Development Corporation, Houston, Texas

This multi-bank community development corporation (CDC) was formed in 1998 by a coalition of five visionary banks. Collectively, they invested approximately $1 million to capitalize the organization. Over the last five years, six additional banks have become investors, bringing total capitalization to about $1.5 million. The corporation intends to stimulate economic development in Harris and surrounding counties by providing loans to small emerging businesses that may not currently qualify for conventional bank financing. Through its network of investor banks, the organization can access capital for loans up to $1 million. The current challenge is to increase the capital base to $5 million. The corporation currently has reached 70 percent of its lending capacity and could reach 90 percent by year-end. They have no delinquencies on their outstanding loans. The credit committee is composed of experienced bankers, who have a flexible approach to credit requests. “We understand that every business transaction is unique,” says Steve Brown, President/CEO. “Our creative and flexible underwriting provides solutions.” Third Coast would like to double its capital over the next 12 months, and then double it again within the following twelve months. For more information contact: Stephen K. Brown, President, Third Coast CDC, (713) 503-5124 E-mail: thirdcoastcdc@aol.com

Georgia Affordable Housing Corporation

Georgia Affordable Housing Corporation (GAHC), a nonprofit organization, was formed in 1998 and is a Community Development Financial Institution (CDFI). GAHC is a lending source and a technical incubator for financing and promoting development of affordable housing units for low- and moderate-income households in Georgia. GAHC mainly concentrates its efforts on small- to medium-sized communities. GAHC has organized a loan consortium made up of financial institutions to provide permanent mortgages for new construction and to rehabilitate multifamily affordable housing units. Loan-to-value ratios associated with GAHC loans are generally lower because of the increased equity investment that results from the use of low-income housing tax credits, HOME funds, or other related affordable housing subsidies. Contact David Young at (404) 888-8237; www.georgiaaffordablehousing.org.

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Western District Image

Western District

Susan Howard   (818) 240-5175
Dave Miller (720) 475-7670



Mountain Plains Equity Group

The North Dakota Housing Finance Agency (NDHFA) has joined with the Montana Board of Housing and the Wyoming Community Development Authority to form the Mountain Plains Equity Group, Inc. (MPEG). MPEG intends to support the development of affordable multifamily housing in rural and urban communities throughout the tri-state area. MPEG is structured as a nonprofit corporation to make investments in low- income housing tax credit (LIHTC) projects and potentially historic tax credit projects. The LIHTC program allows owners of low-income housing to receive an annual federal tax credit for up to 10 years depending on the amount of capital invested in a project and the level of the project’s commitment to serving low-income tenants. Equity funds typically serve as an investment vehicle for banks and insurance companies who, by investing in affordable housing projects, are seeking to: (1) meet social responsibilities, (2) receive Community Reinvestment Act consideration, and (3) earn a return on their investment. Contact: Mountain Plains Equity Group (406) 254-1677;
http://www.mpequity.com/index.htm

Phoenix Community Development and Investment Corporation

The Phoenix Community Development and Investment Corporation (PCDIC) received a $170 million allocation of new markets tax credits during the first round of funding in 2002. The organization was formed by the city of Phoenix. PCDIC intends to develop and rehabilitate blighted areas of the city to stimulate economic development and jobs. PCDIC plans to use the funds in all of the city’s distressed urban areas. Development will be funded with below-market rate loans and equity investments, using a $133 million commercial real estate fund, a $30 million equity fund, and a $7 million small business fund. The real estate fund emphasizes the development of commercial real estate projects, including retail developments, hotels, and office buildings located in low-income areas. The equity fund is targeted primarily at Phoenix’s burgeoning biotechnology sector. The small business fund will provide start-up and expansion loans for working capital and equipment purchase and will provide borrowers with 40 hours of free technical assistance. Contact Roberto Franco, assistant director of Phoenix’s Community and Economic Development Department, at roberto.franco@phoenix.gov.

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