The Low Income Investment Fund (LIIF) has launched a $20 million COVID-19 Low Income Housing Tax Credit (LIHTC) Developer Fee Bridge Initiative to support affordable housing developers grappling with liquidity challenges in the wake of the coronavirus pandemic and ensuing recession. With a guarantee from the Community Investment Guarantee Pool (CIGP), this flexible capital will be available to fill gaps created when fees are stalled in phases of LIHTC development.
The initiative will be available to LIHTC developers who are adversely impacted by COVID-19, providing them with critical liquidity in an uncertain environment. The enterprise-level bridge loans will provide financial support for developers, enabling them to keep balance sheets stable and ensure new affordable housing projects can move forward.
Housing is critical to economic stability and good health, and this has proven especially true during the COVID-19 pandemic. Close to two-thirds of LIHTC developments are in areas where more than 60 percent of the population are people of color. This initiative will help to create much needed affordable housing in communities already impacted by displacement and poor health outcomes that have been exacerbated by the pandemic and recession.
“Prior to the pandemic and recession, we were already grappling with a national housing crisis. We know that affordable housing developers are facing additional challenges in this time, so we need to do all we can to keep affordable housing projects on track,” said Leila Ahmadifar, LIIF’s Vice President of National Markets. “Thanks to our partnership with CIGP, this initiative will provide critical liquidity to developers to keep their projects moving forward and guarantee pay checks for their employees.”
CIGP is providing a 10 percent guarantee for the initiative. CIGP is a new national financing tool for intermediaries working in the affordable housing, small business and climate sectors that provides a central depository of philanthropic guarantees supported by The Kresge Foundation, The Annie E. Casey Foundation, The California Endowment, Chan Zuckerberg Initiative, Common Spirit Health, Gary Community Investments, Jessie Ball duPont Fund, Phillips Foundation, Robert Wood Johnson Foundation, Seattle Foundation, Virginia Community Capital and Weingart Foundation.
LOCUS Impact Investing serves as the program manager for CIGP. A subsidiary of Virginia Community Capital, LOCUS is a national registered investment advisor and nonprofit consulting firm focused on place-based, mission-oriented investment strategies.
This initiative is part of LIIF’s new strategic direction launched earlier this year, which focuses on centering racial equity in all our work, with a particular emphasis on affordable housing and early care and education. Stable, quality, affordable housing is a fundamental social determinant of health and foundational to building communities of equity, opportunity and well-being. With this bridge loan initiative, we are preserving and increasing the supply of quality affordable homes for the most in-need households.