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Article Archives: Colorado
Early-Stage Financing for Habitat for Humanity
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.
Transit-Oriented Development in Denver
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.
If successful, the partnership will build more than 1,000 affordable homes.
For more information about the Fund and partnership, visit the Urban Land Conservancy Web site.
Colorado Single-Family Mortgage Bonds
CHFA's private placement bond program allows each bank investor to select the geographic coverage of its investment, the targeted income of the borrowers, and the size of their investment. CHFA will offer these private placement bonds on a semi-annual basis.
To learn more about these private placement bonds, please contact John Dolton at (303) 297-7328, or visit www.colohfa.org.
[Published in News from the Districts, Community Developments Investments, Spring 2006]
Colorado Revolving Loan Fund Leverages Bank Investments
Contact: Colorado Enterprise Fund (303) 860-0242; http://www.coloradoenterprisefund.org.