NORTHERN CALIFORNIA COMMUNITY LOAN FUND
Grant: $2,000,000 - Community Development Financial Institutions - Jul. 21, 2009
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Award Description: NCCLF was awarded $2 million in order to create new affordable housing opportunities and to provide critically-needed social services for low-income people in northern California's most distressed communities. NCCLF?s clients are the 501(c) 3 nonprofit agencies, cooperatives, and alternatively-structured business ventures across the region?s 46 counties. As defined by our mission, the ultimate beneficiaries of NCCLF?s lending and development services are low- and very low-income individuals (80% of area median income or below) and disadvantaged populations (e.g., seniors and developmentally disabled) served by these organizations. For many nonprofit agencies, it is difficult to absorb the costs of commercial space into their limited budgets while simultaneously increasing their services to a growing number of vulnerable low-income individuals and families. As a result, more nonprofits and community development agencies find themselves in need of financial systems and facilities consulting, predevelopment assistance, and operating and facilities capital to sustain and expand their operations. Our intention is to use up to $1.4 million of the Financial Assistance Award to increase the capital reserves for our revolving loan fund. The current disarray in the credit markets requires a strong base of equity capital in order to maximize NCCLF?s impact. By increasing our capital reserves, NCCLF will be able to: ? leverage additional debt capital ? finance much-needed community projects in a high-risk financial environment; ? continue to offer flexible, low-cost loan products; ? explore ways to improve our products incrementally with lower rates and longer terms; and ? enhance our financial strength and capacity to mitigate the potential impact of the current economy on our portfolio. These facilities allow nonprofits to provide essential services to low income communities, yet to finance such projects often requires taking on risk that conventional financial institutions will not. NCCLF has developed the capacity to effectively manage a high-risk loan portfolio, which includes balloon payments, uncommitted takeouts, high LTVs and low DSCRs, and to provide technical assistance to potential borrowers. Additionally, up to $600,000 will be deployed over three years to cover a portion of the costs of delivering development services to increase the capacity of nonprofit service groups throughout our region, and especially in the high-need Central Valley. NCCLF's Fiscal and Facility Fitness Programs help nonprofits develop the organizational capacity to target every resource toward their mission, enabling them to develop the tools to monitor progress and impact. We provide our clients with the confidence to analyze their program outcomes and make choices based on that analysis. NCCLF?s Lending Program supplies technical assistance to loan applicants, assessing debt readiness and helping them to become creditworthy by identifying weaknesses, shoring up systems, and tackling problems. The systems and tools we help a borrower institute often have effects on the organization and its community long after the loan has been repaid.
Project Description: The Northern California Community Loan Fund (NCCLF) received $2 million from the Department of Treasury's Community Development Financial Institutions (CDFI) Fund as part of the Financial Assistance (FA) award round funded by the American Recovery and Reinvestment Act of 2009. NCCLF received notice of this award on June 29th, 2009 and received funds on July 23, 2009. During the quarter July- September, 2009, NCCLF deployed $616,168 of the award to increase its loan loss reserves. These reserves serve as a basis to reassure current investors and to leverage additional debt capital. These funds also had a direct impact on NCCLF?s ability to continue making loans. During the quarter we closed $2,084,400 in loans. Without the funding received through the American Recovery and Reinvestment Act, NCCLF would have been significantly constrained in its ability to deploy capital in low income communities. In addition, $160,000 was deployed in the form of a line of credit to a nonprofit healthcare provider that serves primarily low-income residents in an area that the federal government has designated to contain a medically underserved population.
Jobs Summary: Over the past quarter, NCCLF provided lines of credit to three nonprofit social service agencies who depend on this financial product to continue operating despite cash flow interruptions. Because of their financial position, most of our borrowers are unable to secure financing from commercial banks. Without us these organizations would face program reductions or closure. Therefore, there are 238 permanent jobs retained in the Bay Area because of $610,000 of loans. In addition, NCCLF provided $1.5 million in debt financing to three real estate projects to develop affordable housing. Our portion of financing leveraged over $20 million in additional financing to make these vital projects possible. Based on estimates of development costs associated with labor and the annual wage for construction jobs in the project area (NAICS code 23), NCCLF estimates 183 temporary FTEs will be generated as a result of these projects. (Total jobs reported: 421)
Project Status: Less Than 50% Completed
This award's data was last updated on Jul. 21, 2009. Help expand these official descriptions using the wiki below.
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