Article Archives: Colorado

Early-Stage Financing for Habitat for Humanity
The Mile High Community Loan Fund (MHCLF), a Denver-based Community Development Financial Institution (CDFI), and Habitat for Humanity Colorado (HFHC) have joined forces to fund the early-stage financing needs of Habitat for Humanity affiliates across Colorado. This partnership works in part because both MHCLF and HFHC share a mission of providing affordable housing for low- and moderate-income families.

This unique arrangement addresses timing issues faced by many Habitat for Humanity affiliates involved with financing real estate development projects, by offering them predevelopment, acquisition, construction, and mini-perm loans.

The Wells Fargo Community Development Corporation enabled this partnership by agreeing to fund a loan request by HFHC. In essence, HFHC re-lends these funds to its Colorado Habitat for Humanity affiliates. The Wells Fargo loan was structured as a five-year, low-interest subordinated note to HFHC. Subsequently, HFHC entered into a Memorandum of Understanding (MOU) with MHCLF, an expert in community development lending, to help it implement and manage this new loan fund program.

Under the MOU, MHCLF underwrites loan requests from Habitat for Humanity affiliates and then presents the loans to MHCLF’s Loan Committee along with recommendations. HFHC makes the final credit decision but takes advantage of MHCLF’s loan policies, product terms, credit infrastructure, and capacity to manage the program. If the loan is approved by HFHC, MHCLF then schedules a loan closing and services the loan on behalf of HFHC.

The two organizations work together to market the program to Habitat for Humanity affiliates and provide technical assistance to potential borrowers. In addition, on a case-by-case basis MHCLF also participates in loans, further leveraging funds and helping to mitigate risk. In 2010, HFHC and MHCLF made three loans totaling $360,000 to Habitat for Humanity affiliates for land acquisition, resulting in 12 units.

For more information regarding this program, e-mail Jeff Seifried, or call (303) 860-1888, ext. 5.
[Community Developments Investments, Spring 2011]

Transit-Oriented Development in Denver
In 2004, Denver voters approved a ballot initiative for FasTracks, a comprehensive mass transit system that expands the current system with 119 miles of rail lines and bus feeder routes. The expansion presents a unique opportunity for housing developers to build affordable housing along the transit routes.

A partnership among Enterprise Community Partners, the city of Denver, and the Urban Land Conservancy was forged to develop affordable housing along the transit routes.

Because it can be cost-prohibitive to hold property for development while the transit system is completed, a $15 million transit-oriented development fund was created.

The fund is a unique approach to meshing urban planning with community development that allows affordable housing developers to buy and hold properties in transit corridors for a period of up to five years. The capital raised for the fund falls into four distinct categories: (1) equity, (2) first-loss funds, (3) unsecured second-loss funds, and (4) regular loan funds. The fund is expected to be operational for up to 10 years-to take advantage of the prime period for transit-oriented development-after which time funds will be returned to the initial investors.

If successful, the partnership will build more than 1,000 affordable homes.

For more information about the Fund and partnership, visit the Urban Land Conservancy Web site.
[Community Developments Investments, Fall 2010]

Colorado Single-Family Mortgage Bonds
The Colorado Housing and Finance Authority (CHFA) has developed a private placement bond program, collateralized by a pool of taxable single-family first and second mortgage loans targeted to low- and moderate-income homebuyers and homeowners, to support the efforts of Colorado banks to invest in affordable housing. This private placement bond program provides an investment opportunity for banks that may qualify for consideration under the Community Reinvestment Act. These bonds, though unrated, are additionally secured by CHFA's general obligation pledge.

CHFA's private placement bond program allows each bank investor to select the geographic coverage of its investment, the targeted income of the borrowers, and the size of their investment. CHFA will offer these private placement bonds on a semi-annual basis.

To learn more about these private placement bonds, please contact John Dolton at (303) 297-7328, or visit www.colohfa.org.

[Published in News from the Districts, Community Developments Investments, Spring 2006]

Colorado Revolving Loan Fund Leverages Bank Investments
Bank investments in revolving loan funds like the Colorado Enterprise Fund can improve the future financial strength of entrepreneurs who may develop into future small business borrowers. The Colorado Enterprise Fund (CEF) is a non-profit community development financial institution providing financing for small businesses that may qualify for future bank loans but need time and experience to demonstrate that they are bankable. CEF provides up to $150,000 to entrepreneurs who are unable to obtain financing from traditional sources. CEF also provides management assistance to their small business borrowers. CEF provides entrepreneurs access to pro bono professional services for legal, accounting, investment banking, and public relations questions. CEF loan programs include a specialized loan program designed to facilitate capital investment in childcare businesses. The expansion of childcare businesses provides a critical service to the employees of many companies as well as economic development. Investors in CEF include the U.S. Small Business Administration, the State of Colorado, US Bank and FirstBank.

Contact: Colorado Enterprise Fund (303) 860-0242; http://www.coloradoenterprisefund.org.
[Published in News from the Districts, Community Developments Investments, Summer 2004]