First $24 Million of CDFI Bond Guarantees Supports Acquisition of a $41 Million Loan Portfolio; $101 Million Remains for Future Investments in the Affordable Housing Industry
NEW YORK, NY -- (Marketwired) -- The Community Development Trust (CDT), the country's first and largest private real estate investment trust (REIT) which provides capital for the preservation of affordable housing, was recently approved for the largest share, $125 million, of the US Department of Treasury's $325 million inaugural round of the CDFI Bond Guarantee Program. CDT immediately utilized $24 million under the CDFI Bond Guarantee Program, the largest use of the program by any organization so far, to support the acquisition of a $41 million affordable housing loan portfolio from the California Community Reinvestment Corporation (CCRC), a premier multi-family affordable housing lender in California. The remainder of the portfolio was financed through CDT's other funding sources. CDT is targeting the majority of its remaining $101 million from the CDFI Bond Guarantee Program to acquire loan pools or tax-exempt private activity bonds originated by other affordable housing lenders across the country.
The CDFI Bond Guarantee Program complements CDT's other funding sources in providing long-term capital to innovative and sustainable affordable housing projects. Over the past three years, CDT has acquired approximately $120 million worth of affordable housing loans originated by a variety of lenders. CDT, a national organization, provides liquidity to the affordable housing industry, allowing lenders to reinvest CDT's mission-oriented dollars into additional community development activities in their local markets.
"This portfolio acquisition from CCRC is the most recent in CDT's long track record of loan transactions, but it is especially exciting because it marks our first use of the Treasury's inaugural CDFI Bond Guarantee Program," said Joseph Reilly, President and CEO of CDT. "The CDFI Bond Guarantee Program allows us to play an important role in the affordable housing industry. The program allows us to provide liquidity for affordable housing lenders in need of long-term, sustainable financing."
The portfolio acquisition, covering 1,375 units, was made up of a combination of twenty loans and tax-exempt bonds secured by affordable housing communities throughout the state of California which provide affordable housing for those most in need -- with 20% supporting residents making 30% or less of area median income (AMI), the most vulnerable tenant population, and 24% directed toward affordable housing for senior residents.
"With a reputation for responsible and diligent work, CDT is a valued partner in the affordable housing industry," said CCRC President Mary Kaiser. "We have had the pleasure of working with CDT since their first loan acquisition in 2002 and our relationship has continued to thrive over the years. We look forward to working with them again on future projects and are confident in our continued success together."
The Community Reinvestment Fund, USA (CRF), is the Qualified Issuer of CDT's $125 million bond allocation under the CDFI Bond Guarantee Program. CRF is a certified CDFI based in Minneapolis, Minnesota, and has issued over 50 structured financial instruments and delivered $1.5 billion in loans nationwide over 26 years.
"We're so glad to have had the opportunity to work with CDT through the Treasury's CDFI Bond Guarantee Program," said Frank Altman, President and CEO of CRF. "They have been a fantastic partner throughout the process. We are looking forward to seeing the positive impact that this program will add to the communities on the receiving end of these needed investments in affordable housing."
CDT's long-term capital resources, including the CDFI Bond Guarantee Program, allow the mission-oriented REIT to acquire a diverse set of affordable housing loans from a variety of lenders, and to continue to provide debt and equity capital to underserved real estate markets nationwide.
The Community Development Trust (CDT) is a national investor in affordable housing. Working with local, regional, and national partners, CDT makes long-term equity investments and originates and acquires long-term mortgages. In its fifteen years, CDT has invested $1 billion in debt and equity capital to properties in 42 states and regions -- helping to preserve and create nearly 35,000 units of affordable housing. CDT is a private real estate investment trust (REIT), a certified Community Development Financial Institution (CDFI), an approved Fannie Mae affordable housing lender, and a member of the Federal Home Loan Bank of New York (FHLBNY).
CRF, a nonprofit organization and certified Community Development Financial Institution (CDFI), is a national leader in bringing capital to underserved areas. Since 1988, CRF has injected more than $1.5 billion into low-income and economically disadvantaged communities around the country to help stimulate job creation and economic development, provide affordable housing, and support community facilities. For more information, visit www.crfusa.com.
About the CDFI Bond Guarantee Program
The CDFI Bond Guarantee Program was enacted through the Small Business Jobs Act of 2010. The program provides Eligible CDFIs with access to long-term capital by providing guarantees of bonds. With long-term credit at below-market interest rates, the CDFI Bond Guarantee Program is a groundbreaking effort to accelerate community economic growth and development. Bonds are 100 percent guaranteed by the U.S. Treasury, including principal, interest, and call premiums. The Federal Financing Bank is the sole purchaser of bonds issued under the CDFI Bond Guarantee Program. For more information please visit http://www.cdfifund.gov/bond.
CONTACT: Zigis Switzer 212.784.5705 [email protected]