To secure new sources of capital and make those funds available in strategic investments to provide flexible financial support to community partners in their efforts to create and preserve affordable housing for working families and those living on fixed incomes in Washington County.
How the Fund Leverages Financing for Affordable Housing
|•||By investing in the early stages of a proposed housing project, the Fund enables its non-profit partners to acquire land, generate architectural drawings, and conduct soil and engineering studies to determine whether or not the project is feasible. These pre-development expenses are financed by loans from the Fund’s revolving loan fund at rates well below the traditional market.
|•||Once this initial feasibility and due diligence work is accomplished, the non-profit project sponsor is ready to seek construction and permanent financing. Typically the initial investment by the Fund at the preliminary stages is leveraged at least 8-9 times by other sources of debt and equity eventually committed to the development.
|•||The Fund is also able to provide strategic investments to bridge the gap between the award and ultimate receipt of an anticipated investment in a given project so as to keep the development timeline moving ahead for the sponsor and solidify the eventual source of funding.
|•||Financing land acquisition by its partners when prices are relatively low and offering patient loans allows the Fund to reduce ultimate development costs and enables non-profits to bank the land until the time is right to leverage available funding to move forward.
|•||Listing pre-development investments from the Fund on a competitive application for County or State funding evidences local, private support and frequently generates more points in the grading, enhancing the chances of leveraging more public dollars.
History of the Community Housing Fund
One of the outcomes of a Washington County strategic planning process in 2002 was the conclusion that there was a significant shortfall in the production of housing affordable to working families and those living on fixed incomes. The single most important strategy to increase that supply was identified as affordable housing production was the creation of new financial resources.Specifically, nonprofit developers of affordable housing cited the need for feasibility and due diligence funding, at below-market rates, to allow for the evaluation of a proposed project. Non-profit developers typically do not have “risk capital” to engage in this early exploratory work, e.g. options on land, soil analysis, architectural drawings, permit fees, and land surveying. These steps are generally required before approaching local governments or conventional lenders for support.In response, the County established the Community Housing Fund in 2003 as a 503(c)3 nonprofit corporation, designed to endure as a long-term capital asset for Washington County. The Fund has a strong Board of community leaders who share and support our mission.The Fund recently passed the $3 million mark in capital raised since inception. Since the Fund’s first grant in 2004, both grants and loans have supported 17 projects across the County, representing the preservation and creation of 500 units. Another 330 units of new construction are in the current pipeline.The Fund is grateful to its public and private investors, including Washington County cities, the County, foundations such as Meyer Trust, the Oregon Community Foundation, and the Joseph Weston Public Foundation, as well as numerous individuals and families who support our mission.We continue our efforts to further capitalize the loan pool through both equity and program-related investments. One-time-only contributions are continually recycled as loans are repaid, thereby increasing the long-term benefit afforded by any single investment.On the deployment side, the Fund serves as an ongoing community catalyst, bringing together potential beneficiaries of proposed housing developments with experienced non-profits who are able to deliver projects as planned and repay loans made by the Fund to further positive outcomes.