Program Will Spearhead Efforts by Top-Rated Community Development Lenders to Invest In Affordable Housing Projects for Underserved Communities
Chicago, IL—The Federal Housing Finance Agency (FHFA) today directed Fannie Mae and Freddie Mac to begin allocating dollars to the Capital Magnet Fund, reversing its temporary suspension on funding for the program. The decision comes after a dedicated and prolonged effort by some of the nation’s leading Community Development Financial Institutions (CDFIs)—Capital Impact Partners, IFF, The Low Income Investment Fund and The Reinvestment Fund—which have advocated that policymakers support funding for the Capital Magnet Fund.
The Capital Magnet Fund has demonstrated a remarkable ability to leverage funds for affordable housing in highly underserved communities. In 2010, Congress appropriated $80 million for the program and the CDFI Fund made 23 awards to CDFIs and nonprofit housing organizations. Those awardees have leveraged the initial federal investment 12 times through other public and private investments, creating over $1 billion in affordable housing and community development projects.
The CDFI Fund’s recent report on this first round of awards also demonstrated that these projects had significant social impact, producing nearly 7,000 affordable homes and creating or maintaining over 5,700 construction and other full-time jobs. In addition, the revolving nature of the funds allows organizations to reinvest the proceeds in quality affordable housing and related economic development activities that create ongoing community benefits.
The Capital Magnet Fund was originally authorized by Congress through the Housing and Economic Recovery Act of 2008 (HERA) to help CDFIs and nonprofit housing organizations finance affordable housing and related economic development activities. Soon after passage of the law, the financial crisis caused the federal government to place Fannie Mae and Freddie Mac under conservatorship. This led to a temporary suspension of allocations to the Capital Magnet Fund until FHFA lifted it today.
“Capital Impact Partners commends the Federal Housing Finance Agency’s decision to support the Capital Magnet Fund,” said Terry Simonette, president and chief executive officer of Capital Impact Partners. “The Capital Magnet Fund is a unique program that will leverage private and public capital to address critical housing needs and create jobs in our country’s most underserved communities.”
“IFF is thrilled about the FHFA’s decision and that our advocacy efforts with Capital Impact Partners, LIIF and TRF have paid off,” IFF CEO Joe Neri said. “With this tool, we can attract significant amounts of private capital to housing projects in the communities where affordable options are needed most.”
“The Low Income Investment Fund (LIIF) joins its partners CIP, IFF and TRF in applauding the FHFA for reinstating funding for the Capital Magnet Fund. We are proud of our collective efforts to demonstrate the effectiveness and necessity of these funds,” said Nancy O. Andrews, president and CEO of LIIF. “The Capital Magnet Fund has proven to be a powerful tool for attracting private sector investment and expanding the availability of affordable housing in low-income communities.”
“The status quo for housing finance in low-income communities was unacceptable, and we thank FHFA Director Mel Watt for this directive,” said Don Hinkle-Brown, CEO of The Reinvestment Fund. “TRF is pleased that the government-sponsored enterprises will again fulfill their mission to help all Americans.”
About Capital Impact Partners
Capital Impact Partners transforms underserved communities into strong, vibrant places of opportunity for people at every stage of life. We deliver strategic financing, incubate new social programs and provide technical assistance to help ensure that low to moderate income individuals have access to quality health care and education, healthy foods, affordable housing and the ability to age with dignity. A nonprofit community development financial institution, Capital Impact Partners has disbursed more $2 billion to revitalize communities over the last 30 years. Headquartered in Arlington, VA, Capital Impact Partners operates nationally with local offices in Detroit, MI and Oakland, CA. Read more at www.capitalimpact.org.
IFF is a mission-driven lender, real estate consultant, and developer that helps communities thrive by creating opportunities for low-income and special needs populations. From child care to senior housing, IFF works closely with clients from every sector, offering affordable, flexible financing; full-scale real estate consulting; and community development services. Since 1988, we have made over $476 million in loans, leveraged $1.5 billion in community investments, and grown our total managed assets to $300 million. For more information, visit www.iff.org.
About The Low Income Investment Fund
The Low Income Investment Fund (LIIF) invests capital to support healthy families and communities. Since 1984, LIIF has served 1.7 million people by investing $1.5 billion. Over its history, LIIF has provided financing and technical assistance to create and preserve affordable housing, child care centers, schools, healthy food retail, health clinics and transit-oriented development in distressed neighborhoods nationwide. LIIF’s work has generated more than $30 billion in family income and societal benefits. LIIF has offices in San Francisco, Los Angeles, New York City and Washington, D.C. For more information about LIIF, visit www.liifund.org.
About The Reinvestment Fund
TRF is a national leader in rebuilding America’s distressed towns and cities, through the innovative use of capital and information. TRF has invested $1.4 billion in mid-Atlantic communities since 1985. A Community Development Financial Institution, TRF finances a variety of projects and activities including food access, health care, education and housing, to build healthy communities in under-invested places. TRF also provides public policy expertise by helping clients create actionable solutions and by sharing data and analysis via www.PolicyMap.com. To learn more about TRF, visit www.trfund.com.