How To Do Affordable Housing When Your Government Is Being A Jerk
Posted by Keli A. Tianga on April 21, 2017
The “proposed” cuts to federal spending on affordable housing programs have become promises in the weeks since preliminary budgets were presented in March. HUD’s budget—with over $6 billion in cuts to public housing and Housing Choice vouchers and the elimination of CDBG funds and the HOME program—harms those most in need of stable and safe housing, and was both shocking and unsurprising. But even before Trump, our eyes were open to the downward trend.
We’ve written about municipalities and states going it alone when federal funding was scarce, but there is promising new news from some groups on financing mechanisms—especially ones that shift the focus from development to acquisition, which is often a stumbling block. They in no way let government off the hook, but it is interesting when smart thinking from the financial industry can be applied to.
Just last week, LISC announced that it is issuing $100 million in general obligation bonds to amplify their economic opportunity work and help drive impact investment capital into urban and rural areas in need. The bonds will have no geographic or programmatic restrictions. Different from the existing CDFI Bond Guarantee Program, this a self-issued bond offering, based on LISC’s own good balance sheet and without any bank or government involvement. And though LISC is the first CDFI to venture independently into the bond market, we understand that a few other groups have also sought out S&P ratings and will be going this route, too.
An affiliate of another CFDI got to work on an FHA bid it won this past March. New Jersey Community Capital’s ReStart offshoot will close in May on a group of 158 nonperforming home loans for properties in New York and New Jersey, Fannie Mae’s sixth Community Impact Pool. The unpaid principal balance on the group of loans totals about $26 million, and as part of their work since 2012, ReStart works with those owners—whose next step would otherwise be foreclosure—to refinance their mortgages with them and stay in the homes. This pool will add to the already hundreds of mortgages ReStart has purchased, and for the homes whose owners cannot or do not want to remain in, NJCC redevelops these properties into affordable housing.
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Keli A. Tianga is associate editor of Shelterforce magazine. Email Keli at Keli@nhi.org