OppCo housing accelerator fund

 
 

A revolving loan fund to help our members accelerate their ability to produce and preserve more affordable homes in low-income communities.

THE CHALLENGE:

To bring our state’s housing costs down, the Commonwealth of Massachusetts has set a goal to create 200,000 homes — including 40,000 affordable and 20,000 deeply affordable homes — by 2030.

Community Development Corporations (CDCs) are well positioned to meet the affordable housing production challenge, but they need low-cost capital to move forward.

OUR SOLUTION:

We’re striving to raise capital for a $20+ million in-house revolving loan fund giving OppCo’s CDC members ready access to acquisition and predevelopment financing at favorable rates for affordable housing production and preservation. The OppCo Housing Accelerator Fund will support ~20% of project costs and banks and traditional affordable housing lenders will provide the rest.

“If we have easy access to flexible, competitively priced capital that allows for a multiyear hold between acquisition and significant capital investments, CDCs can play a critical role in stopping displacement in this market.” — Rafael Mares, The Neighborhood Developers

CDC BENEFITS

  • Members have nimble and flexible access to low-cost capital.

  • CDCs support each other to have more impact across the state.

  • The fund develops the lending track record OppCo needs to become a certified CDFI.

COMMUNITY BENEFITS

  • Accelerate the production of affordable housing.

  • Prevent tenant displacement, retaining community diversity and culture.

  • Upgrade substandard homes.

  • Invest in climate resilience, energy efficiency, and sustainability over time.

Increasing access to capital fulfills our mission, and makes good business sense.

For example, every $3M of low-cost capital could enable an OppCo member to purchase properties with a total of ~80 apartments. Once acquired, the CDC will assemble the financing it needs to transition the homes to permanently affordable.

Investment Opportunity

To reach our goal of $20 million, we seek commitments from philanthropic donors and mission-aligned funders of at least $500,000 as grants, impact investments, loans, guarantees, or patient equity.

$6.2M is committed to date and the capital is already being deployed to support our members’ affordable housing strategies.

Grants and loans are secured from :

  • A Municipality

  • Massachusetts General Hospital

  • Foundation PRIs

  • Bank Equity Equivalent (EQ2) Loans

  • Aligned Nonprofits

Housing Accelerator Fund Supporters

CASE STUDY

Park & Pearl, Chelsea, MA

 

The Neighborhood Developers

Anti-Displacement Strategy: Purchase existing multifamily properties (Naturally Occurring Affordable Housing/NOAH), maintain rents, make necessary repairs, and then permanently preserve them as affordable housing. This cost-efficient method retains the homes’ affordability and prevents displacement.

  • 30 residential units with 9 one-bedrooms, 17 two-bedrooms, and 4 three-bedrooms

  • 2020 under new owner

  • Rents increased by 50%

  • Serious code violations

  • Residents fought rent increases without condition improvements

  • With the Fund’s 20% contribution, TND is assembling funds to acquire the property, renovate to address code compliance and health and safety issues, and maintain affordable rents.

CASE STUDY

El Centro, Salem MA

North Shore Community Development Coalition

Strategy: Partner to bring affordable housing and healthcare to the community.

In partnership with North Shore Community Health, North Shore CDC will revitalize Salem’s South River by embarking on a mixed-use, mission-driven project located at the gateway to the Point Neighborhood.

With 48 apartments that are 100% affordable, El Centro will connect public health, affordable senior housing, climate change preparedness, and public art.