$100 Million Initiative to Preserve Affordable Communities
The Low Income Investment Fund (LIIF), National Affordable Housing Trust (NAHT) and Morgan Stanley have launched a new $100 million initiative aimed at protecting affordable housing for low income families across the nation. An initial $30 million will be immediately available to nonprofit affordable housing providers through the Fund to Preserve Affordable Communities (FPAC). Through FPAC, developers will have access to flexible capital that will allow them to move quickly to acquire properties at risk of turning into market-rate housing. This is particularly critical in highly competitive markets, where the supply of affordable housing for lower income individuals and families is increasingly limited. By providing this critical, early-stage financing, the initiative will allow affordable housing developers to assure long-term affordability for residents and help stabilize communities around the country.
According to a recent report, there is nowhere in America where full-time workers earning the minimum wage can afford a modest two-bedroom rental. In “hot” real estate markets nonprofit developers seeking to preserve affordable housing are often unable to quickly obtain funds to compete with for-profit firms. The FPAC credit facility will provide nonprofit developers with ready access to flexible, affordable capital to take down properties at risk of converting to market-rate housing. The pilot funds are initially available to Stewards of Affordable Housing for the Future (SAHF) members, who represent some of the nation’s top affordable housing developers.
Developed through a partnership among LIIF, NAHT and Morgan Stanley, FPAC will initially provide acquisition loans totaling to $30 million for projects needing funding that will range from $2-10 million with terms up to five years. FPAC expects to eventually make up to $100 million in funds available for preservation efforts with high-capacity nonprofit developers.
Kimberly Latimer-Nelligan, Chief Operating Officer for LIIF, stated, “LIIF is committed to providing capital for housing those most at risk in our country and enabling families to stay in their neighborhoods. We are excited to offer this product to further efforts to continue to provide affordable homes.” LIIF is a nonprofit community capital organization that invests capital to support healthy families and communities. LIIF has provided more than $2 billion in financing to create and preserve affordable housing, child care centers, schools, healthy food retail, health clinics and transit-oriented development in distressed neighborhoods nationwide.
Lori Little, President and Chief Executive Officer for NAHT, noted, “This Fund is an important partnership that provides funding for SAHF members who are experienced in developing safe, quality homes. We are glad to be a part of this key effort.” NAHT is an affiliate of SAHF. SAHF membership consists of 13 national nonprofit affordable housing developers who own and operate more than 130,000 affordable rental homes across the country. SAHF, in collaboration with its members, focuses on policy innovation and advancing excellence in the delivery of affordable rental homes.
Roy Swan, Managing Director and Co-Head of Global Sustainable Finance for Morgan Stanley, said, “Morgan Stanley is grateful to our long-time community partners LIIF and NAHT for their commitment to enhancing the quality of life for low-income Americans. We are pleased at the opportunity to collaborate with LIIF and NAHT to help generate positive community impact.”