Looking for new investment ideas? In this article, OCC's District Community Affairs Officers (DCAO) report on financing initiatives and partnership opportunities in each of the OCC's four districts. While not endorsing specific organizations or programs, DCAOs can provide more information about these and other community development investment opportunities. DCAOs can also consult with national banks in developing successful approaches to community development lending and service delivery approaches.
Click on the map below for the DCAOs in your district.
Vonda Eanes (704) 350-8377
Bonita Irving (617) 737-2528 x223
Denise Kirk-Murray (212) 790-4053
Maryland Linked Deposit Program
The Maryland Linked Deposit Program opened for business in February to help certified minority business enterprises obtain the affordable capital they need to grow and expand their businesses. The statewide program, administered by the Maryland Department of Housing and Community Development (DHCD) and the Maryland State Treasurer’s Office, is intended to stimulate economic opportunities for Maryland’s certified minority business enterprises with reduced-rate loans from participating lenders.
Here’s how the program works: The minority business enterprise submits an application to the Linked Deposit Program, which verifies the applicant’s certification and forwards the application to banks enrolled in the program. The applicant is given the list of participating lenders and is advised to contact a lender who can complete the loan application. The lender makes the loan according to standard underwriting procedures but with an interest rate 2 percent below what the bank would charge for a loan of similar purpose and term. The loan is then enrolled in the Linked Deposit Program.
Why do lenders participate? The loan is backed by an insured certificate of deposit that the state treasurer’s office buys from the bank--at a rate 2 percent below the market rate--to enable the bank to make the reduced rate loan to the minority business enterprise. In this way, the state increases capital available to minority businesses and reduces the potential risks to lenders. Loan terms cannot exceed 10 years and must be used for projects in Maryland.
For more information on the Linked Deposit Program, e-mail Charles Day, program manager for DHCD’s Division of Neighborhood Revitalization, or call (410) 514-7245.
Hope for New Jersey Homeowners
New Jersey homeowners struggling to pay their mortgages and avoid foreclosure have a friend in the New Jersey Homeownership Preservation Effort. This nonprofit organization, a partnership of federal and state government agencies, other nonprofit organizations, and financial institutions, helps homeowners get the information and resources they need to maintain the American dream of homeownership.
The partnership is designed to help consumers understand their mortgages and terms, find out how to resolve mortgage problems, get credit and loan counseling, and find help to avoid foreclosure. Participating lenders offer borrowers programs, including mortgage refinancing, closing cost assistance, credit counseling, and waiver of private mortgage insurance. The New Jersey Homeownership Preservation Effort also offers information on state foreclosure laws, information on buying a home and mortgage assistance, and other information in a resource called the Mayor’s Combat Kit, which is available at their Web site.
For more information, call the New Jersey Department of Banking at (800) 446-7467 or visit the Web site.
Paul Ginger (312) 360-8876
Norma Polanco-Boyd (216) 274-1247 x274
Business Planning and Financing for “Indianpreneurs”
The American Indian Economic Development Fund (AIEDF) provides the American Indian community with gap financing, technical assistance, and business education to stimulate and develop entrepreneurial activities on and off reservations.
Since 1992, this St. Paul, Minnesota–based nonprofit organization has provided business development services and, in some cases, financing to enrolled members of federally recognized tribes in Michigan, Minnesota, North Dakota, South Dakota, and Wisconsin. The nonprofit organization offers a 33-hour, culturally relevant curriculum to help “Indianpreneurs”--the term it uses for American Indian entrepreneurs--develop business plans and improve their management skills and personal financial literacy. The nonprofit organization boasts a 92 percent completion rate for enrolled students and attributes this success rate to a culturally sensitive approach that incorporates Native American traditions and includes Indianpreneurs as members of its faculty.
AIEDF is certified by the U.S. Department of the Treasury as a Native Community Development Financial Institution that provides technical assistance and financing to existing Native American businesses. Since 1992, AIEDF has provided $6 million in gap financing, through loans from $15,000 to $70,000 to Indianpreneurs and leveraged $18 million in additional financing from banks, revolving loan funds, and other sources.
How can banks support AIEDF? Banks are encouraged to:
- Refer Native American business owners needing technical assistance to AIEDF.
- Accept AIEDF loan referrals of Indianpreneurs who have completed business plans.
- Serve as faculty for its Indianpreneur training program and to its loan committee.
- Assist in structuring the AIEDF loan fund into commercial loans to Native American businesses.
- Invest in the AIEDF loan fund and support the nonprofit organization with grants and other funding.
For more information, e-mail David Glass, call (651) 917-0819.
Lifeline for Stabilizing Ohio Neighborhoods
Ohio’s Finance Fund has developed an innovative line of credit for nonprofit organizations to acquire or stabilize vacant or abandoned properties. Finance Fund’s LandLOC (line of credit) provides financing for qualified nonprofit organizations to gain site control of properties or to provide patient capital for nonprofits to resolve legal or tax issues or otherwise secure or maintain properties. Qualified nonprofits must demonstrate capacity and the LandLOC funding must be for projects that are part of a comprehensive plan, either city, county, or regional. The program is currently in a pilot phase that was funded with $1 million in 2007 by the Ohio Housing Trust Fund. So far with the program, two rural and three urban communities have been extended credit. The result of the pilot will be analyzed at the end of the year, but already it is anticipated that additional funding will be needed to expand the financing for other communities, namely in rural areas or for vacant commercial real estate.
Investment opportunities for financial institutions are sought as patient capital for terms of three to five years at a return rate of 3 to 4 percent. Finance Fund is seeking to raise $10 million to finance projects in highly distressed areas and bring about neighborhood stabilization.
For more information, e-mail James R. Klein, Chief Executive Officer, or call (614) 221-1114 x37.
Scarlett Duplechain (832) 325-6952
Karol Klim (678) 731-9723 x252
David Lewis (214) 720-7027
Foreclosed Homes Become a New Opportunity for Louisiana’s First-Time Home Buyers
Macon Ridge Community Development Corporation is helping low-income persons achieve homeownership through the U.S. Department of Agriculture’s 502 Direct Loan Program.
From its base in Ferriday, Louisiana, Macon Ridge relies on the Department of Agriculture program to increase the availability and accessibility of affordable housing in northeastern and central Louisiana.
The program allows Macon Ridge to buy foreclosed properties and, after rehabilitation, to make the homes available for purchase by low-income home buyers. Currently, Macon Ridge makes 25 to 30 single-family units available annually for less than it would cost to build new homes.
As foreclosed properties become more available, Macon Ridge hopes to expand its acquisition and rehabilitation work across the state. To do this, MRCDC needs banks to provide loans for acquisition and rehabilitation of property. In return, banks get new opportunities to return real estate owned (REO) properties to productive use.
For more information, e-mail Buddy Spillers or call (318) 757-2361.
Loan Fund Reinvests in Florida’s Communities
The Florida Community Loan Fund, a statewide community development financial institution, is using financial capital and human creativity to transform lives and communities. Established in 1994, the loan fund allows financial institutions to satisfy community reinvestment performance criteria and receive Bank Enterprise Awards from the U.S. Department of the Treasury’s Community Development Finance Fund, based on investments or grant support made to the loan fund. As the only Florida-based institution to receive a New Markets Tax Credit allocation, the loan fund works with financial institutions to use these tax credits to support community and economic development projects.
Financial institutions; foundations; and other institutional, religious, and individual investors support the work of the loan fund with equity, debt capital, equity equivalent, program-related investments, and operating grants. The loan fund also uses loan participation agreements and lines-of-credit with participating financial institutional investors. Loans range from $5,000 to $1.5 million, with variable terms and interest rates. The loan fund also offers incentives to encourage the creation of sustainable “green” community development projects.
For more information, call Ignacio Esteban, Executive Director, at (407) 246-0846 or visit the Web site.
Houston’s Check to Stability Program
The South Union Community Development Corporation recently established the Check to Stability initiative to help families in Houston, Texas, laboring to avoid foreclosure. To support its mission to eliminate blight and crime in its South Union community, the organization created the program to check on properties needing repair or demolition by the city of Houston. The program is designed to restore vacant properties and make them available as affordable housing for low- and moderate-income families, or when necessary, demolish property to make room for new housing. So far, the program has identified 28 properties.
Check to Stability is the result of collaboration by 15 public, private, and nonprofit organizations working to develop a safe and appealing community. The participants include: South Union Community Development Corporation, the City of Houston Housing Department, Habitat for Humanity, Houston Community College, Urban Land Institute, U.S. Department of Veterans Affairs, Local Initiative Support Corporation, and local construction companies, home buyer education groups, and other providers of services to low- and moderate-income families.
The program enables banks to provide loans for acquisition and rehabilitation, mortgages, and technical assistance to the program’s managers.
For more information, call Efrem B. Jernigan, President and Acting Executive Director, at (713) 747-7002 or (713) 419-8352 or visit the Web site.
Susan Howard (818) 240-5175
Stabilizing Communities Series in California Provides REO Information
The OCC and the Federal Reserve Bank of San Francisco continued their Stabilizing Communities program series with three meetings in the first quarter of 2009 that focused on the transfer of REO properties and the U.S. Department of Housing and Urban Development’s Neighborhood Stabilization Program. More than 200 attended the California meetings that included presentations by bankers and representatives of California’s Housing and Community Development Department, Fannie Mae, and other groups involved with residential real estate.
Each meeting also included a presentation by the National Community Stabilization Trust on its efforts to work with partners to help communities suffering from high rates of foreclosure. Attendees learned about financing opportunities for organizations seeking to acquire National Stabilization Program properties and for prospective home buyers, and they also learned how banks can support community efforts.
For more information, e-mail Susan Howard, Lena Robinson, Melody Winter-Nava, or Daryl Rutherford.
Equity Fund Provides Capital for Affordable Housing Development in Kansas City
The Kansas City Equity Fund works to stimulate the development of affordable rental housing for low- and moderate-income families living in the 15-county Kansas City metropolitan area. The fund was established in 2006 as an affiliate of the St. Louis Equity Fund and used corporate investments and tax incentives to achieve its goals. The fund also has a predevelopment loan program to assist developers in financing initial project costs and to help them submit well-supported investment proposals for review by the fund’s investment committee.
The funding pool comprises 10 investor banks and has nearly $7 million in equity investments providing high-quality affordable housing in the Kansas City metropolitan area. The fund benefits from its relationship with the St. Louis Equity Fund, which has more than $30 million in equity investments under management, representing 3,300 units of affordable housing.
The Kansas City Equity Fund is actively seeking additional investment capital. For more information, e-mail Erica Dobreff or call (816) 753-0941.