The metro Atlanta housing market was especially hard hit by the recession and the foreclosure crisis. Nine of the nation’s top 10 underwater zip codes were located in metro Atlanta (Haas Institute 2014). ANDP, a long-standing Reinvestment Fund partner in Atlanta, has been widely recognized for the critical role it has played in placing previously foreclosed properties back into use and rebuilding neighborhoods as Atlanta continues to recover from this crisis.
Reinvestment Fund has provided two loans, the first in 2017 and the second in 2018, to support this project that is focused on developing scattered site properties to create market affordable, for-sale housing opportunities in stable communities. Homes developed will be affordable to buyers with household incomes between 80-120% of the Area Median Income.
Reinvestment Fund’s loan capital is a portion of funds leveraged through a New Markets Tax Credit (NMTC) structure to support this project that is developing homes in severely distressed census tracts. NMTCs have typically been used to support economic development activities and mixed-use development with rental housing, but has seen very limited use related to for-sale housing. The financing structure for this project is modeled after an approach pioneered by Habitat for Humanity, working with Smith NMTC Associates and US Bank, which allows credits to be used for for-sale housing.
Housing Partnership Network (HPN) is providing the NMTC allocation for the project, replicating the Habitat model to support single-family development activities of its higher capacity developer members. The structure enables ANDP to benefit from the NMTC equity and repay loans using sales proceeds.
In addition to financing ANDP’s project, Reinvestment Fund has provided financing using a similar structure to nonprofit housing developers Community Asset Preservation Corporation in New Jersey and Develop Detroit.