The Business Journal - Fresno/Madera/Kings/Tulare

Non-Profit Lender Targets Valley’s Homeless

By Halley Cornell
Staff Writer
August 15, 2003
The Business Journal

A Sacramento-based organization taking aim at the affordable housing gap has named the Central Valley as one of seven initial target regions for its national homelessness to homeownership initiative. Nehemiah Community Reinvestment Fund, a nonprofit community development lender, will begin making short-term, low interest loans to community and faith-based organizations here for the development of affordable, workforce and special needs housing.

The fund, which the Nehemiah Corporation of California will capitalize with an initial equity contribution of $5.5 million, would also provide loans for community facilities and economic development in low-income communities.

The Central Valley’s limited community development capital resources as compared to larger metropolitan areas like the Bay Area or the Los Angeles basin make it a natural choice for initiating the fund, said Jones. NCRF staff will travel periodically to the Fresno area to market loans, meet potential borrowers and look at property offered as collateral for loans, said Peggy Jones, head of the fund.

Loans will range in size from $10,000 to $750,00 with interest charged between five and 10 percent and a term limit of five years. The short-term loans will allow for a recycling pool of funds from which NCRF can finance multiple projects. Most housing loans, said Jones, will be three years or less.

“The amount of the loan is determined by the costs of the proposed project and how much of a gap remains,” she said. “We want our borrowers to obtain as much ‘free’ money as possible and to work with conventional lenders when they can. We work to fill the gaps that occur between public and private capital. In this way, we leverage our limited capital with other monies to achieve the greatest impact possible.”

NCRF is particularly interested in financing affordable housing projects serving low-income people, including seniors, Jones said, and will be targeting much of its outreach to nonprofit and for-profit housing developers serving those groups.

Projects such as group homes and transitional housing for those striving to overcome homelessness, substance or domestic abuse are also in line with Nehemiah’s mission to transform lives through homeownership. The organization’s target loan portfolio is comprised of approximately 60 percent housing, 20 percent community facilities and 10 percent economic development funds.

NCRF’s housing loans will finance all phases of development from feasibility studies and land purchase to construction and short-term permanent financing. The organization plans to aid those it funds with financial and technical assistance throughout the life of the loan, Jones said.

“One of our goals is to help organizations that are financially sound but with no credit to build credit so they can eventually obtain financing from conventional sources. Part of this involves growing the management capacity of the organization.”

To date, NCRF has financed solely Sacramento-based projects. The fund’s loan to St. Hope Development Company there helped rehab an abandoned hotel and theater that now provides 12 units of market rate housing, ground floor retail and an arts center.

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