Metro Denver Habitat for Humanity Attracts NMTC Funding through St. Louis Collaboration
June 13, 2012 -- ST. LOUIS, MO : Habitat for Humanity of Metro Denver, Inc. and nine other Habitat affiliates in Nebraska, Michigan, Connecticut, Missouri, Washington, Arizona and Florida will share nearly $20 million of New Markets Tax Credits (NMTC) to build 239 homes.
The Metro Denver affiliate, funded on May 24, 2012, will use its $1,880,000 Qualified Low Income Community Investment (QLICI) loan to build ten homes for industrious low-income families in distressed neighborhoods in Commerce City, Golden and Lakewood. Each of the homes will be built to an Energy Star (whole house energy savings minimum of 15%) or higher standard, providing future cost savings. The Metro Denver affiliate recently received the 2011 Energy Star award for Excellence in Affordable Housing. Ranging in size from 990 – 1350 square feet, the homes are scheduled for completion by June 29, 2012.
Established by Congress in 2000 in an effort to stimulate investment and economic growth in designated low-income communities, the NMTC program helps raise investor capital and leverages public and private funding to provide borrowers, like these Habitat affiliates, with financing that comes in the form of very favorable rates and below market, flexible terms. Partnerships like this one, orchestrated by Smith NMTC Associates, LLC with CEI Capital Management LLC and the Metro Denver Habitat for Humanity affiliate and invested in by U.S. Bank, help Habitat affiliates stretch their fundraising and development dollars, increasing the nonprofit’s ability to meet its mission of building decent, affordable housing for those in need.
An additional benefit of receiving NMTC funding for Habitat home builds are the number of local businesses and volunteers that get involved in the build, furthering their businesses and the local economy. For this project 38 construction subcontractor jobs were created to perform electrical, mechanical and plumbing work on all 10 NMTC homes. Nationally, 18 full time and 15 part time new Habitat affiliate jobs were created and a total of 387 construction jobs were created from CCML’s total NMTC investment of nearly $20 million. Each Metro Denver Habitat Family Partner contributes 250 sweat equity hours before purchasing their home. They pay a modest down payment, sign standard loan documents, and make affordable, monthly mortgage payments to repay the 0% interest loan over 20-30 years. This Habitat affiliate offers homeownership opportunities to low-income families unable to obtain conventional financing.
Once thought impossible to apply to for sale, affordable single family housing, NMTC dollars now help Habitat affiliates build more homes and make more interest free loans available to industrious Habitat family partners. CCML utilized the Smith NMTC Model developed by Smith NMTC Associates specifically to tackle the roadblocks to NMTC funding of smaller projects associated with affordable, for sale, single family housing. In order to structure the investment, CCML partnered with U.S. Bank, which capitalized CCML’s NMTC allocation and leveraged fundraising and development dollars raised by Habitat. Fulfilling the mission of the NMTC program to attract new investment capital to disadvantaged communities, the loan is a boon in a year where securing viable real estate financing for affordable, single family homes, is difficult, if not impossible in some areas of the country.
This is the second time that Smith NMTC has worked with the Metro Denver Habitat affiliate to bring NMTC investment to their community.
Howard Smith, JD, Principal and co-founder of Smith NMTC acknowledged the significant evidence that the NMTC is working. “NMTC financed over $20 billion in loans and equity investments to businesses located in communities with substantial rates of poverty and unemployment through 2010,” Smith noted. “CEI Capital Management and U.S. Bank have been ideal partners to bring NMTC funding to Habitat for Humanity of Metro Denver and other parts of the country.”
This is the first time that CCML, a for-profit subsidiary of Coastal Enterprises, Inc. (CEI) of Maine has underwritten NMTC funding of single family homes with a Habitat affiliate. It is also the first time CCML has invested NMTC dollars in Colorado.
“CCML is pleased to be a partner with Smith NMTC in developing a creative way to fund Habitat for Humanity of Metro Denver,” said Tad Atwell, CCML’s Senior Investment Officer. “This project hits on each of our ‘Triple E’ underwriting criteria, where the beneficiary furthers economic progress, social equity and environmental sustainability.”
The Metro Denver Habitat affiliate acknowledges the advantages of having NMTC funding available to increase its budget and capabilities in helping more families achieve home ownership.
Heather Lafferty, CEO for Habitat for Humanity of Metro Denver, noted, “Habitat is always looking for new sources of funding that will allow us to help more people achieve home ownership. These NMTC dollars help stretch our budget to build additional homes in areas in need of decent, affordable housing. We appreciate being selected for this NMTC funding.”
Frank and Shiane are current partners with Habitat Metro Denver. These future homeowners have worked hard to overcome obstacles in their life to achieve the dream of homeownership. A blended family of nine, these parents have been determined to complete their partnership requirements on the road to purchasing their home with a zero-percent interest mortgage. Read more about their road to homeownership here: http://www.habitatmetrodenver.org/index.php?option=com_content&task=view&id=249&Itemid=1
Habitat for Humanity of Metro Denver, Inc., CEI Capital Management LLC, U.S. Bank and Smith NMTC Associates, LLC, partnerships building communities, are looking forward to seeing the 10 new Habitat Family Partners at work with local business and volunteers raising their new houses and fulfilling a time-honored American dream.
Resources for Journalists and Readers:
Representatives from Habitat for Humanity, Smith NMTC Associates LLC, CEI Capital Management and U.S. Bank are available to discuss the details of this NMTC funding, home buildout scheduling and more. To arrange an interview please contact Marjorie Pingel at 314-406-7273.
New Markets Tax Credits (NMTC) Defined:
The Community Development Financial Institutions (CDFI) Fund
In 2000, as part of the Community Renewal Tax Relief Act, Congress established the NMTC Program with the goal of attracting new investment capital to disadvantaged communities. Through a competitive process, certified Community Development Entities are awarded allocations of tax credits - which they can use to attract and raise capital for projects in low-income communities - by the CDFI Fund through the Department of the Treasury.
Article on the Smith NMTC Model:
Habitat for Humanity of Metro Denver, Inc. (www.habitatmetrodenver.org) is an independently operated affiliate of Habitat for Humanity International with a mission to eliminate poverty housing by building simple, decent, affordable houses for people in need, which helps revitalize neighborhoods. The Metro Denver Habitat was founded by volunteers in 1979, and since then, has built more than 400 homes in the Denver metro area, housing over 1,800 people. They were honored as the National Affiliate of the Year in 2005 and more recently received the 2011 Energy Star Award for Excellence in Affordable Housing. Thousands of donor and volunteers have worked together with this Habitat affiliate and their partner families to make these homes a reality, building stronger neighborhoods and affecting measurable change in the community.
CEI Capital Management LLC (CCML) is a for-profit subsidiary of Coastal Enterprises, Inc. (CEI) that furthers CEI’s mission to help create economically and environmentally healthy communities in which all people, especially those with low incomes, can reach their full potential by working to help attract capital to low-income area using the U.S. Treasury Department’s NMTC program.
Since the program’s inception in 2003, CEI and CCML have been awarded $778 million of investment capacity under the NMTC program. CCML has placed $607.7 million of this capacity in 55 projects nationwide, triggering total private capital investment in low income communities of over $1.79 billion that directly supports CEI’s triple bottom-line or “3E” measures for economic progress, social equity and environmental sustainability. CCML has a national service area under the NMTC program with an emphasis on rural areas and core market of Maine, New Hampshire, Vermont, upstate New York, and western Massachusetts. For more information, visit http://www.ceimaine.org/CCML
Smith NMTC Associates, LLC facilitates transactions with New Markets Tax Credits, (NMTC) a fairly unknown (but growing in name recognition) federal tax credit program administered by the Department of Treasury’s Community Development Financial Institution Fund (CDFI Fund). The program is delineated in Section 45(d) of the Internal Revenue Code, as amended in 2008.
In conjunction with other CDEs, Smith NMTC has provided more than $200 million of financing in support of construction, financing and sale of Habitat homes across the nation. This translates into 2,227 homes being built for needy families while revitalizing low-income communities in more than 25 states and creating more than 3,000 construction and nearly 1,000 permanent jobs. For more information, www.smithnmtc.com and press kit www.smithnmtc.com/press-kit/.
U.S. Bank is a recognized leader in financing a variety of community development initiatives. U.S. Bancorp Community Development Corporation, the tax credit investment subsidiary of U.S. Bank, finances community development and affordable housing projects through the use of New Markets, Historic, Low-Income Housing, and Renewable Energy Investment Tax Credits. These equity investments have provided much needed revitalization and new resources to communities throughout the country. Visit U.S. Bank on the web at www.usbank.com.
In conjunction with Smith NMTC and seven Community Development Entities, USBCDC has provided more than $200 million of financing in support of the construction, financing and sale of Habitat homes across the nation. This translates into 2,227 homes being built for needy families while revitalizing low-income communities in more than 25 states and creating more than 3,000 construction and nearly 1,000 permanent jobs.
This press release has been issued by P3 Strategies Inc provider of Strategy, Marketing and Media world-wide for Social Entrepreneurs and organizations seeking a triple bottom-line. For more information, www.p3strategiesinc.com or 314-835-0300.