The National Housing Trust Community Development Fund (NHTCDF) promotes the long-term preservation of quality housing for low- and moderate- income persons and families, combats community deterioration and promotes the economic revitalization of distressed areas through the provision of fiscally prudent loans to entities engaged in developing and maintaining quality affordable housing. NHTCDF is committed to safeguarding existing affordable homes which is the essential first step in solving the nation's affordable housing dilemma.
NHTCDF's lending focuses on a particular niche: the preservation of the existing affordable housing stock and the provision of the early money critical to getting preservation developments off the ground. These loans are often the critical first step that makes the development and subsequent attainment of commercial financing possible.
NHTCDF provides early money by making two types of loans: 1) predevelopment and 2) interim development loans. Predevelopment loans allow feasibility, environmental, valuation and other studies prior to property acquisition. Interim development loans generally provide funds to acquire ownership of a property pending the often arduous process of obtaining permanent financing or fill a short-term gap in permanent or construction financing.
NHTCDF also offers special predevelopment and interim development loans to developers preserving affordable housing that is healthy and environmentally sustainable using green design techniques. The financing provided through NHTCDF's Green Affordable Housing Preservation Loan Program requires that non-profit developers work with green experts to determine how green elements can be incorporated in their project's design. These loans are offered at below market rates and a portion of the loan is forgiven based on the Borrower's good faith efforts to incorporate green design elements that are practicable for the preservation project.
The loans made by NHTCDF serve a target market of low and moderate income families. At a minimum, loans are only made to affordable developments that meet the IRS guidelines for nonprofit affordable housing entities which ensures that at least 75% of the units are affordable at 80% of area median income. In fact, the typical income of the family units served by NHTCDF loans is less than $10,000 or 50% of the area median income.
NHTCDF measures its community impact by tracking the number of total affordable homes preserved and rehabilitated. NHTCDF also tracks the private dollars leveraged by each transaction. Facilitating private investment into underserved communities is an important part of NHTCDF's mission, the goal is not to subsidize the transaction, but rather to leverage private investment into housing that serves NHTCDF's target market.
Since 1999, NHTCDF has provided 50 loans totaling $10 million to support the acquisition, rehabilitation and preservation of more than 5,000 affordable apartment homes, and leveraging another $400 million in private investment in these communities.
After 25 years without significant renovations and major building systems in disrepair, the residents of Twining Terrace Cooperative in Washington, D.C. realized they needed to take action to save their homes. But before major work could even begin, the cooperative association needed to develop a comprehensive construction plan that included engineering assessments, appraisals, contractor bidding, and many other predevelopment needs. The problem: Taking these steps cost money that the cooperative did not have on hand. In response, they turned to the National Housing Trust for help. Full Story