NMTCs help fund largest all EcoBUILD Habitat community in Memphis
August 1, 2012 --ST. LOUIS, MO: Habitat for Humanity of Greater Memphis and 10 other Habitat affiliates in West Virginia, Tennessee, Texas, Oregon, Arizona, Florida, Wisconsin, Ohio, North Carolina and California will share $22 million of New Markets Tax Credits (NMTC) funding to help build 198 homes nationally.
In Tennessee, Memphis Habitat received a $1,880,000 Qualified Low Income Community Investment (QLICI) from CEI Capital Management LLC (CCML) of Portland, ME that enabled the affiliate to fund 17 homes ranging in size from 1150 - 1637 square feet in Trinity Park, Memphis Habitat’s first planned development and the largest all EcoBUILD (local Energy Star equivalent), single-family community in Memphis at any price point. Funds will also enable Memphis Habitat to build additional homes in the coming year. They will be sold to Habitat partner families who contribute 350 sweat equity hours, pay a modest down payment, sign standard loan documents, and make affordable, monthly mortgage payments on a 0% interest loan over 20-30 years. Memphis Habitat offers homeownership opportunities to low-income families unable to obtain conventional financing.
The NMTC program is administered by the U.S. Treasury and is designed to spur new investments or increase investment into operating businesses and real estate projects located in designated low-income communities. The program provides tax credits as an incentive for private investment 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 (Smith NMTC) with CCML and Memphis Habitat, 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.
The idea of applying NMTCs to “for-sale” affordable housing as a funding vehicle for Habitat for Humanity Affiliates was the primary goal and focus of Smith NMTC co-founders Howard Smith, JD, Principal and Donna Smith, JD, Executive Vice President. Howard had served as president, general counsel and a member of the Habitat for Humanity St. Louis board of directors for over 20 years and knew the revitalizing impact home ownership had on low-income communities. After discussing the idea with NMTC officials at U.S. Bank and putting together a working model, the Smiths saw their idea build – literally. The Smith NMTC Model now makes NMTC dollars available to help Habitat affiliates build more homes and make more interest free loans available to industrious Habitat family partners.
“Earlier this year, Habitat Memphis marked a significant milestone with the completion and sale of their 400th home,” noted Howard Smith, JD, Principal and co-founder of Smith NMTC. “This is the second time Memphis Habitat has attracted NMTC funding since January 2011. We are happy to support their good work and momentum in Memphis with NMTC funding. With continued help from U.S. Bank, and partners such as CCML, we have helped Habitat affiliates build 2,626 homes for needy families in 30 states since 2008.”
Memphis Habitat recently won the 2012 Governor’s Environmental Stewardship Award for Excellence in Green Building award for its Sustainable Building Program. In 2011, it was the top builder of single-family, EcoBUILD-certified homes in Shelby County. All of its homes are built to this standard; they are 33 percent more energy efficient, use 30 percent less lumber and generate 75 percent less construction waste than traditional homes. Homes also incorporate sustainable features such as Energy Star windows, appliances, lighting and ceiling fans; low-flow toilets, faucets and showerheads; recycled drywall and carpet; brick and cement-fiber board siding; OSB sheathing and house wrap; radiant roof decking; and low-VOC paints and coatings.
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. In Memphis, 39 construction or pre-development jobs were created to perform electrical, mechanical and plumbing work on all 17 NMTC homes. Nationally 310 full time and 36 part time Habitat affiliate jobs were retained and a total of 696 temporary construction jobs were created from CCML’s total NMTC investment of nearly $22 million.
”CCML is pleased to be a partner with Smith NMTC in developing a creative way to fund Habitat for Humanity of Greater Memphis,” said Tad Atwell, CCML’s Senior Investment Officer. “This project hits on each of our underwriting criteria where the beneficiary furthers economic progress, social equity and environmental sustainability.”
Habitat for Humanity of Greater Memphis, CEI Capital Management LLC , U.S. Bank and Smith NMTC Associates, LLC, partnerships building communities, are looking forward to seeing the new Habitat partner families at work with local business and volunteers raising their new houses and fulfilling a time-honored American dream.