Loan Programs

Housing
Short-term loans for affordable housing projects including: single family (both rental and ownership), multifamily, special needs and transitional.

Community Facilities
Short-term loans for facilities benefiting low income or underserved communities. Examples include (but are not limited to): nonprofit offices, community centers, childcare facilities, shelters, medical and/or dental clinics, adult day health care facilities.

Economic Development
Short-term loans for projects in low-income or underserved communities, which will contribute to community revitalization and create or retain jobs.

Loan Products

- Land Acquisition	- Predevelopment	- Site Development
- Construction	- Acquisition/Rehabilitation	- Mini-permanent
- Refinance	- Line of Credit	- Working Capital

Terms and Conditions:

Amount
$10,000 to $750,000

Term
Up to five years for term loans and 12 months (renewable) for lines of credit

Interest Rate
Priced according to risk.

Loan Fees
Commitment Fee: 1% and Closing Fee: 1%

Collateral

• Real estate, when possible
• Subordination to conventional lenders considered
• Will consider alternatives to real estate
  

  - Assignment of leasehold interest	- Certificate of Deposit
  - Irrevocable letter of credit	- Loan Guarantee
  - Income Stream	- Assignment of Revenue
  - Suggest something for us to consider

Loan-to-Value
Up to 90%

Debt Service
Coverage Ratio 1.05 or better

Borrowers

• Nonprofit agencies 501(c)(3)
• Governmental or quasi-governmental agencies
• For-profit developers/contractors/builders, when significantly partnered with a nonprofit

Project
Must be located in a low-income census tract OR serve a majority of very low to moderate-income people

Eligible Areas: Entire United States

• Projects must either serve a majority of very low to moderate income (up to 110% of AMI) people OR be located in a low-income census tract
• Generally Applicants must be unable to obtain sufficient affordable conventional financing to enable the project to go forward
• Organizations should have been in business for 3 years.
• All loans must have collateral.
• Loans are short-term (five years or less) in order to maintain a constantly recycling pool of funds, permitting the financing of many more projects resulting in greater community impact.

Underwriting Criteria

All borrowers must have a record of providing positive community benefits to low-income individuals, families or neighborhoods. NCRF staff will underwrite credit applications and make recommendations based on, but not limited to, the following:

• The proposed loan will efficiently use NCRF resources by leveraging other funds, when possible
• Borrower has the managerial competence to execute the project, evidenced by
  • Organizational structure with clear chain of accountability and minimal turnover
  • Managers have adequate skill base, past experience and control of the organization
  • Board members (or members of other governing body) possess relevant skills and experience, and hold regular meetings dealing with substantive policy issues
    
• Borrower has the financial capacity to meet the terms of the proposed loan, evidenced by
  • History of positive cash flows and/or demonstrated steady growth
  • Diversity of revenue sources (e.g., fees for service, membership dues, rental income, government contracts, grants from individuals or foundations, corporate support, etc.)
  • Access to funds or adequate contingency plans to provide a “second way out” in the event of problems (e.g., sale of property, cash collateral, capital campaign, guarantor)
  • Strong financial systems evidenced by formal and regular budgets, plans and reports
    
• Project viability
  • Financial projections for the entire project, including the first three years of full operations
  • Review of market study or feasibility analysis, if applicable
  • Level of community support
    
    
• Collateral (with appropriate valuation)
  • Real estate, when possible
  • Subordination to conventional lenders considered
  • Alternatives to real estate:
    • Assignment of leasehold interest
    • Certificate of deposit
    • Irrevocable letter of credit
    • Income stream
    • Assignment of revenue
    • Loan guarantee

Loan Approval Process

Generally the approval process takes 4 –6 weeks once the completed loan application and all other necessary documentation has been submitted. We ask that you contact us prior to applying so that we can discuss your project. Before completing the loan application we will provide you with a pre-application. We will make loan commitments generally for 90 days although longer commitments will be considered.