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

Western District

Greater Phoenix Service Corps of Retired Executives

The Service Corps of Retired Executives (SCORE) has undergone changes to meet the needs of 21st century entrepreneurs.

SCORE is the technical assistance arm of the SBA. The organization is outreach-focused and approaches small business owners using current technology, training, and technical assistance tools that are essential for success in today’s challenging business environment.

The Greater Phoenix SCORE, one of three chapters in Arizona, is a dynamic organization that operates throughout Maricopa and Pinal counties.

The organization partners with the Arizona Department of Education, local businesses and governments, financial institutions, and other business and education organizations to provide services to the small business community. Counselors and workshop trainers come from business and government in addition to the traditional retired executive pool.

In existence since 2008, Greater Phoenix SCORE offers services at more than 20 locations. The program is seeing increased enrollment, up 200 percent from 2009, a reflection of the current economic climate.

Banks can participate in the program in a variety of ways, including offering marketing or financial support, or providing space for counseling and workshops.

For more information, e-mail Maryanne Weiss, Chairman of the Greater Phoenix SCORE program.

Transit-Oriented Development in Denver

In 2004, Denver voters approved a ballot initiative for FasTracks, a comprehensive mass transit system that expands the current system with 119 miles of rail lines and bus feeder routes. The expansion presents a unique opportunity for housing developers to build affordable housing along the transit routes.

A partnership among Enterprise Community Partners, the city of Denver, and the Urban Land Conservancy was forged to develop affordable housing along the transit routes.

Because it can be cost-prohibitive to hold property for development while the transit system is completed, a $15 million transit-oriented development fund was created.

The fund is a unique approach to meshing urban planning with community development that allows affordable housing developers to buy and hold properties in transit corridors for a period of up to five years. The capital raised for the fund falls into four distinct categories: (1) equity, (2) first-loss funds, (3) unsecured second-loss funds, and (4) regular loan funds. The fund is expected to be operational for up to 10 years—to take advantage of the prime period for transit-oriented development—after which time funds will be returned to the initial investors.

For more information about the Fund and partnership, visit the Urban Land Conservancy Web site.

Southern District

Florida Preservation Fund

The Florida Community Loan Fund is seeking banks to invest in the new Florida Preservation Fund to preserve affordable rental housing throughout Florida.

The Florida Preservation Fund is launching a pilot program in Orange, Palm Beach, and Pasco counties. Banks operating in any of these counties are invited to invest in the preservation fund. Additionally, the Florida Community Loan Fund can tailor investments to fit the CRA needs of individual banks.

The program will combine $4.8 million in support from the Florida Housing Finance Corporation with $20 million in debt from private investors to deploy up to $24.8 million in financing across the three counties.

The preservation fund will provide developers with access to lower-rate, short-term bridge loans for acquisition, stabilization rehabilitation, or limited predevelopment costs. The maximum loan size is $5 million with a fixed rate for a three-year term. All the work of the preservation fund must preserve long-term affordability.

To date, the preservation fund has secured $14.3 million in investments and commitments. The Florida Community Loan Fund is working closely with Florida banking institutions as well as other types of investors, including trade associations, religious institutions, and foundations to assemble the remaining balance needed to capitalize the preservation fund.

The Florida Community Loan Fund is a statewide community development financial institution, using financial capital and human creativity to transform lives and communities.

For more information, call Ignacio Esteban, Executive Director, or Rich Rollason, Development Officer, at (407) 246-0846.

Southeast Mississippi Community Investment Corporation

The Southeast Mississippi Community Investment Corporation (SEMCIC) provides borrowers in Forrest, Lamar, and Perry counties a unique opportunity to obtain gap or direct financing.

SEMCIC is a nonprofit Mississippi corporation dedicated to creating and expanding businesses, supporting non-traditional business loan applicants, and developing job opportunities for low- and moderate-income individuals.

Established in 1993, SEMCIC is an initiative of the Area Development Partnership with funding from several local banks. In the last 17 years, the corporation has provided loans to diverse entities, including child care facilities, manufacturers, restaurants, retailers, tax services, and trucking companies.

Participating banks include BancorpSouth Bank, Great Southern National Bank, Hancock Bank, Regions Bank, and Trustmark National Bank

Member banks partner with SEMCIC, which provides up to 50 percent of the total loan funds requested and takes a second lien position. Member banks are also granted a voting seat on the SEMCIC board of directors.

The SEMCIC assistance is a valuable tool for member banks to complete marginal deals for their institutions. SEMCIC is actively seeking additional loan capital to continue its efforts to build strong communities—one business at a time.

For more information, e-mail Annie McMillan or call (601) 296-7512.

New Markets Tax Credit Allocation in Texas

The NMTC was designed to stimulate private investment and economic growth in low-income urban neighborhoods and rural communities. The program offers a seven-year, 39 percent federal tax credit for Qualified Equity Investments (QEI) made through CDE investment vehicles.

CDEs use capital derived from the tax credits to make loans to or investments in businesses and projects in low-income areas.

An allocation of $30 million was awarded to Pacesetter CDE in Richardson, Texas. Pacesetter CDE will use its NMTC allocation to provide subordinate small business financing in Texas.

Pacesetter CDE will invest primarily in businesses owned, controlled, and/or managed by women and minorities. These loans will have lower-than-market interest rates, substantial interest-only payment periods, longer-than-standard loan amortization periods, and no origination fees.

The program focuses on investments that increase the number of permanent jobs or the salaries of those jobs.

For more information, e-mail Giovanni Capriglione or call (972) 725-0313.

Northeastern District

Project Restore™ Aims to Increase Successful Foreclosure Modifications

By some estimates, as many as 12 million homeowners are facing foreclosure in the next five years. To combat this trend, the National Foreclosure Mitigation Counseling Program and the Making Home Affordable Program, sponsors of Project Restore, are working to help troubled borrowers restructure their mortgage loans. Data collected by the OCC show the help is needed because more than half of homeowners who receive loan modifications will redefault within one year.

Those programs are also working with HomeFree-USA and the Mabuhay Alliance. HomeFree-USA is a leading U.S. Housing and Urban Development-approved homeownership preparation and foreclosure prevention counseling organization. The Mabuhay Alliance is a financial counseling agency primarily serving the Pan-Asian community. They are partnering with Project Restore™ in a program to increase the success rate on loan modifications.

The program offers a process to stabilize homeowners and improve their financial condition through a structured approach of managing debt, increasing savings, and improving credit status.

Project Restore combines high-touch coaching, behavior modification, financial discipline, and financial education with banking technologies that are already commonly used in the marketplace. Through automated bill-pay and other easy strategies, program participants can remain within their budget and pay their mortgage and other financial obligations on time.

Homeowners enrolled in Project Restore participate in one-on-one counseling with a financial development coach, behavior modification sessions, and financial education classes on debt management, budgeting and saving, credit repair, and homeownership.

Throughout the year-long program, the homeowner’s situation is assessed, a budget is prepared, and a Financial Reconditioning Achievement Plan is developed.

Over the coming year, HomeFree-USA and the Mabuhay Alliance hope to work with financial institutions to enroll 1,200 families in Project Restore.

For additional information visit the HomeFree-USA Web site or e-mail Marcia Griffin or Faith Bautista.

New Jersey Tax Credits Revitalize Neighborhoods

The New Jersey Neighborhood Revitalization Tax Credit Program provides the opportunity for banks and nonprofits to invest in New Jersey’s communities.

This state tax credit program is designed to promote revitalization of the distressed neighborhoods across the state. The program is administered by the New Jersey Department of Community Affairs, Division of Community Resources.

Participating banks receive a 100 percent state tax credit for each dollar invested in the revitalization of low- and moderate-income neighborhoods in New Jersey. A bank can invest between $25,000 and $1 million a year for each project; the program encourages multiple-year commitments. The program is authorized to award up to $10 million annually.

The investment funds provided by banks are used by participating nonprofits for community development projects approved by the state community affairs department.

Projects may focus on affordable housing, economic development, workforce development, open space, social services, business assistance, and other activities that promote neighborhood revitalization. At least 60 percent of each project must support housing and economic development. To be eligible, a project must be located in an approved municipality.

To qualify for the program, a nonprofit organization must submit a comprehensive neighborhood plan to the state community affairs department for approval. Banks can either identify an approved nonprofit partner on their own or work with the department to be matched with a nonprofit whose projects have been approved by the department.

To find out more about the New Jersey Neighborhood Revitalization Tax Credit Program and the current list of eligible municipalities, visit the New Jersey Department of Community Affairs Web site or call (609) 633-6273.

New Upstate New York Housing Tax Credit Fund

The Upstate New York Community Fund was created by the Great Lakes Capital Fund to enable banks and corporations to reduce their federal tax liability while supporting the development of affordable housing through LIHTC investments.

The fund specifically targets affordable housing development in the upstate New York region and will accept investments as low as $250,000.

Great Lakes Capital Fund is a nonprofit LIHTC syndicator supporting affordable housing development in Illinois, Indiana, Michigan, Wisconsin, and now New York through the creation of this new fund.

Since its inception, the company and its affiliates have invested more than $1.5 billion in housing and community development activities supporting 450 developments, 25,000 housing units, and 1 million square feet of commercial and community space.

For more information, e-mail Jim Logue or call (517) 482-8555; or e-mail Dennis Quinn or call (313) 841- 3751. You can also visit the Great Lakes Capital Fund Web site.

Central District

Ohio Launches a New Market Tax Credits Program

Last fall, Ohio created its own state NMTC program to leverage federal NMTCs, encourage private investment in Ohio businesses, and spark revitalization in Ohio's communities.

Ohio’s NMTC is similar to the federal NMTC in that the credits are structured over a number of years. The total tax credit value is 39 percent over seven years.

Tax credits will be awarded to CDEs that have federal tax credit allocations. The CDEs will then be required to invest the federal and state credits into Ohio businesses and projects.

As private markets have struggled, this type of program has become increasingly important for businesses needing access to capital. Investors will receive state credits in exchange for delivering below-market-rate investment options to Ohio businesses. To date, five other states have initiated similar programs to leverage federal NMTCs.

Ohio’s Department of Development administers the program and began accepting applications during summer 2010. For more information, e-mail Mark Lundine or call (614) 644-6552.

Partner for Community Development

Partners for the Common Good is a national nonprofit CDFI that participates in loans originated by for-profit and nonprofit CDFIs across the United States. The organization also can identify additional participants for loans.

Partners for the Common Good manages a $20 million capital pool provided by several dozen investors, including banks, religious organizations, and health care institutions, foundations, and the CDFI Fund of the U.S. Department of the Treasury.

By functioning as a wholesale lending network and helping other CDFIs manage liquidity, loan limits, and concentration risks, Partners for the Common Good provides an innovative service to the CDFI industry. The organization also enables its investors to direct their capital to organizations serving communities left out of the economic mainstream.

Since 2002, Partners for the Common Good has made 85 loans totaling $22 million. Approximately two-thirds of the loans in which the organization has participated are for affordable housing or community facilities in low- and moderate-income communities in the United States.

Most of the remaining loans have gone to domestic mission-driven enterprises and nonprofits for working capital, commercial development projects, and other purposes. Banks seeking CRA consideration for their investments can restrict where Partners for the Common Good uses its capital.

Banks can refer prospective borrowers that do not meet conventional credit criteria to Partners for the Common Good, which can then find investors to participate in that financing structure or identify grants needed to facilitate the transaction.

For more information, visit the Partners for the Common Good Web site, e-mail Chief Executive Officer Jeannine Jacokes or call (202) 689-8935.