CDFI Impact Blog

 

 

Program Notes: Eligible Uses of Capital Magnet Fund Awardshttps://www.cdfifund.gov/impact/Lists/Posts/ViewPost.aspx?ID=30Program Notes: Eligible Uses of Capital Magnet Fund Awards<div class="ExternalClassCCB7510979464FBBBCF651B9DFB1C156"><p>Earlier this month, the Capital Magnet Fund (CMF) team held a conference call to provide more information about the Capital Magnet Fund program and to encourage potential applicants to start preparing for the release of the fiscal year (FY) 2017 Capital Magnet Fund Notice of Funds Availability (NOFA), <a href="/news-events/news/Pages/news-detail.aspx?NewsID=257&Category=Updates" target="_blank">expected later this spring</a>. The <a href="/Documents/CMF%20Outreach%20Conference%20Call%20Slides%20510_for%20release.pdf" target="_blank">presentation</a> from that call can be found on the CDFI Fund’s website.</p><p>One topic covered during the call was the eligible uses of Capital Magnet Fund award dollars for Affordable Housing and Economic Development activities. A Capital Magnet Fund award can be a flexible tool for meeting affordable housing and related economic development needs in low-income communities. There are several eligible uses of CMF award dollars: </p><ul><li><p>An <i>Affordable Housing Fund</i> can be capitalized with a CMF Award. Combined with other public and private funds, an Affordable Housing Fund can be used to make loans, grants, or equity investments in Affordable Housing. The type of financing which may be offered from the Affordable Housing Fund varies and can be either short- or long-term in nature. For example, an Affordable Housing Fund may be used for predevelopment lending; construction loans; or permanent financing for rental housing, down payment loans, or subordinate mortgages for homeownership. </p></li><li><p>A <i>Revolving Loan Fund</i> can be capitalized with a CMF Award. A revolving loan fund is usually a pool of funds that is used to make loans for either Affordable Housing and/or Economic Development Activities. Revolving loans tend to be short term in nature and usually are intended to be re-paid so that the loan proceeds can be used to provide additional loans. </p></li><li><p>A CMF Award can be used to create <i>Loan Loss Reserves,</i> which are funds set-aside to cover losses on loans, in the form of cash reserves, or through accounting-based accrual reserves. This financing tool can help developers incur debt for riskier projects, or reduce the cost of debt used to finance development. </p></li><li><p><i>Risk-sharing loans</i> can also be made using a CMF Award. These are loans in which the risk of default is shared by the CMF Recipient and other lenders (e.g., top loss or participation loans). These types of loans can provide access to financing that is not readily available for affordable housing development, particularly in distressed areas. </p></li><li><p><i>Loan Guarantees</i> can be made with a CMF Award to repay all or a portion of a loan in case of default by the borrower. Loan Guarantees also help to provide access to financing that is not readily available for Affordable Housing Activities, particularly in distressed areas. </p></li><li><p>CMF Awards can also be used to capitalize an <i>Economic Development Activities Fund,</i> which can be used to finance the development, preservation, acquisition and/or rehabilitation of buildings that house businesses or Community Service Facilities (e.g., health clinics). CMF-financed Economic Development Activities must be part of a community Concerted Strategy and in proximity to Affordable Housing.</p></li></ul><p>As you can see, this “menu” of eligible uses offers CMF Recipients a great deal of flexibility to design financing products that can address a variety of affordable housing and economic development needs. For example, previous Capital Magnet Fund awardees have undertaken:</p><ul><li><p>Financing for manufactured housing in rural areas. </p></li><li><p>Loans to assist with down-payments and closing costs for first-time home buyers. </p></li><li><p>Financing the development of health centers in mixed-used affordable housing.</p></li><li><p>Preservation of rental housing to support the long-term affordability of properties with expiring subsidies.</p></li><li><p>Mixed-income housing in conjunction with related economic development projects, such as providing access to healthy food, health clinics, childcare, retail options, and other critical services.</p></li><li><p>The development of affordable housing for seniors and for persons with disabilities. </p></li></ul><p>The wide range of eligible uses of a Capital Magnet Fund Award means that applicants have the opportunity to tailor their applications and activities for the best fit for their organizations and communities. We encourage prospective applicants to learn more about the program and how a Capital Magnet Fund Award may work for your organization. More information can be found in the program’s <a href="/Documents/Capital%20Magnet%20Fund%20Statute.pdf">statute</a> and <a href="/Documents/Interim%20Rule%20FR%202016-02132.pdf">interim regulations</a>, as well as the <a href="/Documents/CMF%20Outreach%20Conference%20Call%20Slides%20510_for%20release.pdf">FY 2017 outreach presentation </a>on the CDFI Fund’s website. </p><p>To learn more about Capital Magnet Fund, please visit <a href="http://www.cdfifund.gov/cmf">www.cdfifund.gov/cmf</a>. You can also <a href="https://service.govdelivery.com/accounts/USTREASCDFI/subscriber/new">subscribe through our website </a>to receive updates from us to learn when the FY 2017 round is open to receive applications. </p><p><i>Marcia Sigal is the Program Manager of the CDFI Fund’s Capital Magnet Fund program.</i></p> </div>Marcia Sigal2017-05-25T12:38:00ZPrograms and Initiatives30GP0|#a52ce078-0bf5-4ef8-aa4b-0b66902683da;L0|#0a52ce078-0bf5-4ef8-aa4b-0b66902683da|Capital Magnet Fund;GTSet|#52f34ab0-6f81-4fe6-b393-2715c7089532
Capital Magnet Fund Delivers Affordable Senior Housinghttps://www.cdfifund.gov/impact/Lists/Posts/ViewPost.aspx?ID=25Capital Magnet Fund Delivers Affordable Senior Housing<div class="ExternalClassB3CFACC845884B3EBBB9B453790E0F36"><p>High unemployment and foreclosure rates were the predominant drivers in the recent economic downturn that hit Sparks, Nevada. <a href="/Documents/REVISED%20Nevada%20Idaho%20CDFI%20CMF%20Impact%20Story%20042717.pdf" target="_blank">Read the full story here</a>.</p></div>2017-05-25T16:30:00ZLocal Impact25GP0|#a52ce078-0bf5-4ef8-aa4b-0b66902683da;L0|#0a52ce078-0bf5-4ef8-aa4b-0b66902683da|Capital Magnet Fund;GTSet|#52f34ab0-6f81-4fe6-b393-2715c7089532;GP0|#de30e2bf-6549-447e-817a-0765bc57660f;L0|#0de30e2bf-6549-447e-817a-0765bc57660f|Nevada
The Capital Magnet Fund Helps Reinvigorate a Communityhttps://www.cdfifund.gov/impact/Lists/Posts/ViewPost.aspx?ID=32The Capital Magnet Fund Helps Reinvigorate a Community<div class="ExternalClassC1B60366DE6A4E21B0E3638A414F9401"><p>The Court Tower Apartments, a 14-story 1970s affordable housing building in the heart of Oshkosh, Wisconsin, had become an eyesore in the community. The building was dated, run down, and in the words of a longtime neighbor was “dangerously close to becoming a slum.” The Oshkosh Housing Authority (OHA)had a vision of a completely transformed building designed to enhance the quality of life for the building’s residents—low-income seniors and adults with disabilities, some of whom had experienced homelessness.</p><p> <a href="/Documents/Forward%20Community%20Investments%20CMF%20Impact%20Story-FINAL.pdf" target="_blank">To read the full story, click here.</a></p></div>2017-06-30T17:00:00ZLocal Impact32GP0|#78de02a6-ea08-4eec-90a2-57d6bb226cb7;L0|#078de02a6-ea08-4eec-90a2-57d6bb226cb7|Wisconsin;GTSet|#52f34ab0-6f81-4fe6-b393-2715c7089532;GP0|#a52ce078-0bf5-4ef8-aa4b-0b66902683da;L0|#0a52ce078-0bf5-4ef8-aa4b-0b66902683da|Capital Magnet Fund