A National Community Development Financial Institution (CDFI)Flexible Loan Capital Customized to Create Affordable Housing

Community Asset Preservation Corporation

In 2018, Community Housing Capital (CHC) and Calvert Impact Capital (Calvert) provided a $7 million line of credit to Community Asset Preservation Corporation (CAPC) to create a fund with almost unlimited flexibility to purchase blighted, scattered-site, single-family properties in New Jersey. Jeffrey Crum, CAPC’s Chief Investment Officer said, “CHC has been our number one lender since 2010. Our track record with CHC enabled us to attract Synchrony Bank as an outside investor to bring true equity to our program, not just debt resources. The new fund serves an area median income (AMI) range that is lower than average tax credit projects, and does it all with vastly less government subsidy.”

CHC extended its first line of credit to CAPC in 2010 with the National Community Stabilization Trust as its participant. This line has increased in size over the years, and to date, it has revolved nearly six times, producing 289 homes (66% resale and 34% rental). In 2017, CAPC approached CHC and Calvert seeking senior debt for its second Asset Stabilization Fund (ASF2). The funds would be used to continue to evolve CAPC’s successful, scattered-site acquisition model. The first asset stabilization fund successfully deployed $27 million and hit all of its social and fiscal targets. ASF2 will provide funding to bring an estimated 165 housing units back online over the next three years.

The $14 million ASF2 targets neighborhoods that have been ravaged by the foreclosure crisis, neglected for many years, and, in general, are among the poorest in the region. CAPC renovates these mostly vacant homes only after its experienced in-house construction team completes a robust property acquisition and rehabilitation (Go/No-Go) and disposition (for sale or for rent) analysis. CHC brings strong back-office administrative support including the ability to efficiently process CAPC’s weekly draw request, allowing CAPC to utilize small local contractors for their jobs. Crum added, CHC has a servicing platform that works really well for this type of work. It allowed us to go to Synchrony Bank and show them a plan and a successful approach that gave Synchrony a lot of comfort to move forward with a $2.5 million equity investment. The capital stack also included some investment from Community Loan Fund of New Jersey and project subsidies we intend to raise over the next three years, some of which are already committed. Today, our rental units are serving families with an average AMI of 45%, and with subsidies from the Department of Justice, CAPC also provides up to $50,000 in down payment assistance to help families earning up to 120% AMI (with most families earning between 80% and 90% AMI) to purchase our for-sale homes.

CAPC has created an effective and successful revitalization model for the region. “For the first time we attracted not only debt resources and subsidy but also 3rd-party investors,” said Crum. “Our long-term relationship with CHC has allowed us to take an innovative approach to this work.”