The NMTC Houses That Habitat Built in Kent County
June 13, 2012 -- ST. LOUIS, MO : An infusion of nearly $20 million of New Markets Tax Credits (NMTC) funding split evenly between Habitat for Humanity of Kent County and nine other Habitat affiliates in Colorado, Nebraska, Connecticut, Missouri, Washington, Arizona and Florida will help build 239 homes nationally.
In Michigan the Habitat for Humanity of Kent County affiliate, funded on May 24, 2012, will use its $1,880,000 Qualified Low Income Community Investment (QLICI) loan from CEI Capital Management LLC (CCML) of Portland, ME to build 10 homes in a distressed area of Kent County where poverty rates are between 25.90% - 40.60% and unemployment is between 1.45 – 3.71 times the national average. The Kent County homes, ranging in size from 1230-1530 square feet will be completed between May 2012 and December 2013.
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 Kent County Habitat 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.
Each of the homes will be Leadership in Energy and Environmental Design (LEED) certified by the US Green Building Council and built to an ENERGY STAR® (whole house energy savings minimum of at least 15%) providing cost savings over the life of the home. An additional benefit of the Habitat home builds receiving NMTC funding are the number of local businesses and volunteers that get involved in the build furthering their businesses and the local economy. Twenty construction subcontractor jobs were created to perform electrical, mechanical and plumbing work on all 10 NMTC homes in Kent County. Nationally, 18 full time and 15 part time 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 Habitat Family Partner contributes 300-500 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.
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 Kent County and other parts of the country. We are also happy to work with the Kent County Habitat affiliate for a second time as they build more homes with NMTC dollars and gain knowledge and experience of the compliance process.”
“CCML is pleased to be a partner with Smith NMTC in developing a creative way to fund Habitat for Humanity of Kent County,” 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 Kent County Habitat affiliate acknowledges the advantages of having NMTC funding available to increase its budget and capabilities in helping more families achieve home ownership.
“Raising funds to build and restore homes is a challenging part of our job,” said Mary Buikema, Executive Director, HFHKC, “so the availability of New Markets Tax Credit dollars to build Habitat homes is a tremendous advantage to us. We are using the proceeds of this NMTC funding to support additional efforts in the lowest income area of our affiliate. We have targeted these specific neighborhoods knowing that we can have the greatest impact when we do many homes in a concentrated area.“
Habitat for Humanity of Kent County, 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 with representatives from Habitat for Humanity, Smith NMTC Associates LLC or CEI Capital Management, please contact Marjorie Pingel at 314-406-7273.
New Markets Tax Credits (NMTC) Defined:
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 Kent County www.habitatkent.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 Kent County Habitat was founded and incorporated in Michigan in 1983, and since then, has built more than 300 homes in the Kent and Eastern Ottawa Counties, including 100 LEED certified homes. They are the top producing affiliate in Michigan and were honored as ”Affiliate of the Year” in 2007 and received the “Corrie Bair Inclusive Communities Award for Housing” from the State of Michigan Disability Council for building homes with ZeroStep entry. Thousands of donors and volunteers have worked together with this Habitat affiliate and their partner families to make these homes a reality, building stronger neighborhoods and effecting 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 NMTCprogram.
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.