As LIIF celebrates its 40th year of service and commitment to improving underserved communities, we express heartfelt gratitude to our supporters from the private, philanthropic and public sectors who have played a crucial role in this incredible journey. Your essential partnership has empowered us to strengthen our position as a trusted partner with a proven track record of success. The numbers tell the story: Our organization has now invested more than $3.5 billion to serve 2.5 million people in 32 states. Additionally, our 2020 Strategic Plan featured a goal of driving $5 billion in investments to strengthen communities. By the end of FY24, we had already reached 61% of that 2030 goal.
LIIF’s strong financial health is evidenced by our continued top-tier ratings from S&P (A/Stable) and Aeris (Four Stars ✦✦✦✦ AAA Policy Plus). Despite the challenges in the nation’s financial sector — such as post-pandemic factors and high interest rates even from Community Reinvestment Act (CRA) loans — in FY24 our organization achieved a high-water mark of $338 million invested.
LIIF’s trademark and highly distinctive portfolio/asset management resulted in our having among the lowest delinquency rates in the community development financial institution (CDFI) industry, plus our net assets increased by $14 million. Our organization met the moment with a combination of rigor, responsiveness and innovation, as we have through economic cycles over our 40 years. LIIF’s flexible, patient capital, which we define as loans and grants, went toward affordable housing, now at 100,000+ units created or preserved; early care and education (ECE) centers and family child care homes, with over 400,000 children’s spaces positively impacted; and community facilities, such as charter schools and federally qualified health centers (FQHCs), creating an ecosystem of support.
Four years into LIIF’s Impact-Risk-Profitability (IRP) Framework, our accountability mechanism that is seen as an industry model, we are ensuring all-the-deeper impact for housing developers and child care providers – and their communities we are honored to serve. LIIF has implemented a scorecard featuring dimensions of impact, such as taking into account a developer’s history in the sector rather than just their balance sheet. Once we had an agreed-upon blueprint for the Lending, Portfolio Risk Management and Asset Management teams to use moving forward, we thought it would be informative to see where we have been. Our in-depth Lookback Project has been completed, with an analysis of 200 deals from FY21-FY24. The data will drive our lending practices.
Exemplifying our investments is The Knox single-room-occupancy (SRO) hotel, for which LIIF provided a $12 million construction loan to nonprofit housing borrower Tenants and Owners Development Corporation (TODCO). This catalytic-impact loan supports the substantial rehabilitation of a 140-unit, single-room-occupancy (SRO) apartment building located on Sixth Street in San Francisco’s South of Market (SoMa) neighborhood, where many of the city’s extremely-low-income residents and those experiencing being unhoused live. The project was originally constructed in 1994 by TODCO, which over the last eight years had attempted at various times to obtain financing to rehabilitate the three-decades-old project to attend to critical deferred maintenance. Forging strong partnerships, LIIF’s funding complemented that of the San Francisco Mayor’s Office of Housing and Community Development (MOHCD) and the California State Housing and Community Development (HCD) Portfolio Reinvestment Program (PRP). The Knox SRO has the distinction of being the first HCD PRP project to close. The project is 100% affordable for tenants earning 40% or below Area Median Income (AMI). Wraparound supports include social work and case-management services, connection to health clinic screenings and mental health services. Additionally, dimensions of wellness offerings comprise exercise, art, meditation and yoga classes, plus there is an on-site food bank offering food staples.
LIIF also drives policy that strengthens the entire CDFI industry. While there are numerous federal capital sources in the CDFI Fund’s toolkit, there is a need for feedback from those using these products. Whether the Capital Magnet Fund (CMF), which LIIF was instrumental in creating in 2008, the Bond Guarantee Program (BGP), New Markets Tax Credits (NMTC) or other lending tools, we work alone or in coalition to make sure coffers are fully funded, terms are amenable and reporting is streamlined.
Another tool is the Low-Income Housing Tax Credit (LIHTC). Knowing the proven value of this federal program that provides tax credits to developers in exchange for building or renovating affordable rental housing for lower-income households, LIIF has an affiliate LIHTC syndicator, the National Affordable Housing Trust (NAHT). Their goal is to put residents first. Stewards of Affordable Housing for the Future (SAHF), a collaborative of a dozen nonprofit housing developers, is also part of this synergistic joint venture.
On the ECE front, we are pleased to report that we have now surpassed half a billion dollars invested in the sector in our 25 years of leadership in this niche space for a CDFI. Our Build Up business model now comprises facilities fund management, capacity building and advisory services. In the past year, we continued our efforts as facilities fund manager for the $350.5 million California Department of Social Services’ Infrastructure Grant Program (IGP), with thousands of center-based and family child care facilities bettered across the Golden State. We also scaled our co-location work: LIIF started working with both the state of Oregon and Multnomah County (Portland), with 26 co-location projects of child care and affordable housing. We forge strong partnerships to foster co-location efforts, such as LIIF’s Brighter Futures Fund (BFF) collaboration with Goldman Sachs, which helps child care small businesses buy their buildings.
2024 also saw our ECE footprint greatly expand. We launched the Supportive, Healthy, Inspiring and Nurturing Environments (SHINE) Facilities Fund in Harris County, Texas (Greater Houston); completed a landscape analysis of ECE across Georgia, from urban centers to rural communities; and commenced conducting a comprehensive, yearlong process for a landscape analysis of the ECE sector in New Mexico. In all cases, partnerships were forged with government entities, with $600 million in such contracts now under our belt. We supplement these efforts with advisory services. Our work is tailored to meet the unique needs of providers in specific regions.
As we set the stage for LIIF decades ahead, we will continue challenging ourselves by pushing the boundaries. This will best drive forward our mission that “everyone in the United States can live in a community of opportunity, equity and well-being.”
Year after year, borrower after borrower, LIIF has been building our success and impact, being seen as a trusted stalwart and a leader in community development since 1984. Our organization is excited for the decades ahead, as we leverage our four decades of success to be visionaries for how capital can be nimbly deployed to create communities of opportunity.
Where there is investment, there are buildings.
Where there are buildings, there are people supported.
Where there are people supported, there is the strengthening of communities.
Join us!
In partnership,
Daniel A. Nissenbaum
Chief Executive Officer, Low Income Investment Fund (LIIF)
Reymundo Ocañas
LIIF Board Chair
PNC Bank Executive Vice President, Director of Community Development Banking