LIIF has provided a $4.67 million acquisition loan and a $750,000 predevelopment loan to CRP Affordable Housing and Community Development (CRP) for their Pinnacle Pass project in Scotts Valley, Santa Cruz County, California. The LIIF acquisition loan utilizes $500,000 of Capital Magnet Funds (CMF) as credit enhancement, allowing the loan-to-value (LTV) to be 100%. A traditional bank typically lends only 80% of a project’s value, leaving developers to find the remaining 20% elsewhere. CMF allows CDFIs, such as LIIF, to fill that gap, so we can finance a greater percentage of a project’s acquisition cost. What this means for communities is that more affordable housing projects can move forward because developers don’t have to hunt for additional funding sources that might not exist. In the case of Pinnacle Pass, this allowed LIIF to provide CRP with extra liquidity to purchase the 1.9-acre site located along Mt. Hermon Rd. LIIF has provided CRP with early-stage financing for two other impactful California projects: The Junction in Tracy; and Sandstone Valley Apartments in Murrieta.
This single-building project will have 40 units (including one manager’s unit), comprising 23 two-bedroom units and 17 three-bedroom units. Ten of the units will be reserved for households with at least one person with mental or physical disabilities; these units will be supported by project-based vouchers CRP has secured from the Housing Authority of the County of Santa Cruz. The project has deep affordability, with 13 units at 30% area median income (AMI), five units at 40% AMI and seven units at 50% AMI (remaining units are at 70% AMI.)
The LIIF acquisition loan utilizes $500,000 of Capital Magnet Funds (CMF) as credit enhancement, allowing the loan-to-value (LTV) to be 100%.