LISC's New Fund Supporting $100M of Affordable Housing
Posted October 25, 2011
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NEW YORK - The Local Initiatives Support Corp. (LISC) has created a financing conduit for the development of $100 million of affordable housing units, using a $5 million grant and $19 million loan to seed the Neighborhood Revitalization Loan Fund.
The Capital Magnet Fund provided the grant; Morgan Stanley funded the loan. The fund will provide early financing and loan guarantees required by investors and construction lenders through 30 LISC urban programs in the US and the Rural LISC.
The 61-unit Zapata Apartments in Chicago's Logan Square neighborhood received the first loan - $3.6 million to bridge its Tax Increment Financing. The project has been stalled two years despite the strength of its backing by one of the city's leading nonprofit developers,
Bickerdike Redevelopment Corp.
The Capital Magnet Fund last fall awarded $80 million in grants to LISC and 22 other organizations to spur development of affordable rental housing and community facilities as well as attract significant private capital to the effort. LISC used its allocation to lay the groundwork for its new fund, which is earmarked for predevelopment, acquisition and construction loans. The fund also will provide liquidity and Section 8 guarantees, enabling developers to borrow funds to complete and operate projects to offset investment uncertainty about federal funding commitments.
LISC's new fund will focus on Low Income Housing Tax Credit (LIHTC) projects. "The Neighborhood Revitalization Loan Fund will aid us in pushing LIHTC projects forward," said Joe Hagan, president and CEO of the Chicago-based National Equity Fund, LISC's LIHTC affiliate. "To say the LIHTC market has been up and down over the last few years is an understatement. This new LISC fund will help put shovels in the ground, support developers that are critical to community revitalization, and move struggling families into decent, affordable homes."
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