FOR IMMEDIATE RELEASE:
October 5, 2016
Vermont Community Loan Fund
CONTACT: Jake Ide [email protected], 802-223-4423
Vermont Community Development Organizations Awarded $4.45 Million
From US Department of Treasury’s CDFI Fund
Grants Will Support Job Creation, Entrepreneurialism, Affordable Housing, Community Services
Four Vermont economic development organizations received grant awards totaling $4.45 million from the US Department of Treasury’s Community Development Financial Institutions Fund (CDFI Fund) late last month.
The Flexible Capital Fund, Housing Vermont, NeighborWorks of Western Vermont and the Vermont Community Loan Fund will use the awards to provide services to Vermonters who lack access to financial services and resources.
“This is great news for economically distressed communities in Vermont that lack adequate access to capital and affordable financing,” said Sens. Patrick Leahy (D-Vt.), Bernie Sanders (I-Vt.) and Rep. Peter Welch (D-Vt.). “Because of these targeted funds, individuals, businesses, and projects in the areas of our state that need it most will get capital to create jobs, fund housing projects, stimulate business development, and invest further in our communities.”
In FY2016, the CDFI Fund’s CDFI and Capital Magnet Fund programs awarded $277.2 million in awards to 190 organizations in 48 states, including the District of Columbia. Since its creation in 1994, the CDFI Fund has awarded more than $2.2 billion to CDFIs, community development organizations, and financial institutions through the CDFI Program, the Bank Enterprise Award Program, the Capital Magnet Fund, and the Financial Education and Counseling Pilot Program.
“With today’s awards, the CDFI Fund has crossed the $2 billion threshold,” said CDFI Fund Director Annie Donovan. “This milestone underscores the transformative impact CDFIs are having in low-income, distressed, and underserved communities and areas of persistent poverty. In businesses financed, real estate developed, affordable housing constructed and improved access to the financial system, CDFIs are empowering change and revitalization in their communities.”
The Flexible Capital Fund will use their $700,000 CDFI Fund award to make additional investments, provide development and business assistance, and support loan loss reserves.
“CDFI funds are a critical component of our capital mix, increase our ability to invest in more innovative Vermont businesses, and provide much needed advisory support for our portfolio companies”, says Janice St. Onge, President of the Flexible Capital Fund. “As a mission-based lender, we are a long-term partner with our portfolio companies who strengthen and build new markets that contribute to the environmental, social, and economic health of Vermont and the region.”
The Flexible Capital Fund provides creative financing in the form of near equity capital (subordinated debt and royalty financing) to growth-stage companies in Vermont’s food systems, forest products, and clean technology sectors. As the only licensed lender in Vermont to provide royalty financing (also known as “revenue-share” financing), the Flex Fund invests in Vermont companies that strengthen or fill a gap in their supply chain. Learn more: www.FlexibleCapitalFund.org
Housing Vermont will use their $2 million CDFI Fund grant to provide short term pre-development and bridge loans as well as permanent subordinate debt to affordable housing developments using federal housing tax credits. The debt will be offered at below-market interest rates with non-conventional collateral and other flexible terms. The funds are expected to promote the production and preservation of nearly 950 affordable rental apartments in the next five years.
“It’s critical that we increase the resources that we can draw upon to create affordable housing,” said Housing Vermont President Nancy Owens. “This grant, which builds upon our success as a statewide community development and affordable housing organization, is a significant step in that effort.”
Housing Vermont is a private, nonprofit development company founded in 1988 to produce permanently affordable rental housing for Vermonters through partnerships with communities and the private sector. Since its inception, Housing Vermont has raised more than $330 million in private equity to finance 171 affordable rental housing developments throughout the State. This equity has leveraged an additional $435 million in private financing and public investment. The 5,120 apartments created or renovated in these efforts serve low and moderate income Vermonters including seniors and those with special needs. Many developments also include commercial space. Housing Vermont’s New Markets Tax Credit program, Vermont Rural Ventures, has created favorable financing in excess of $117 million for 14 economic development projects in low income areas. Learn more: www.housingvermont.org
NeighborWorks of Western Vermont will use their $500,000 CDFI Fund award to help Vermonters overcome hurdles to sustainable homeownership. These include accessible loan products and innovative partnerships such as the Healthy Homes Initiative with the Rutland Regional Medical Center, where patients are “prescribed” repairs to their homes to mitigate the causes of asthma, COPD, or trips and falls.
“A lot of people will benefit from the CDFI grant whether they are the ones meeting these challenges or the ones taking care of others with challenges. We are thrilled to have this opportunity to help,” said Ludy Biddle, Director of NeighborWorks of Western Vermont.
NeighborWorks of Western Vermont is a sustainable homeownership non-profit organization serving Addison, Rutland, and Bennington Counties. NWWVT works to help Vermonters become educated about finances and homeownership, find homes to purchase, get the loans they need to buy homes, and renovate their existing homes to make them healthy, safe, and efficient. Learn more: www.nwwvt.org
The Vermont Community Loan Fund will use their $1.25 million CDFI Fund award to provide financing to Vermont businesses, nonprofits and developers of affordable housing whose capital needs aren’t met by traditional lenders. Over the three year grant period, VCLF plans to lend more than $23 million to create or preserve 2,000 Vermont jobs, 775 affordable homes, quality early care & education for 840 children and essential services for over 100,000 Vermonters.
“Since 1996, CDFI Fund awards totaling almost $10 million have been incredibly important to the Loan Fund’s ability to grow and to continue to build Vermont’s businesses and vital services,” said VCLF Executive Director Will Belongia. “The grant not only provides us with significant lending capital, but also allows us to leverage investments from the private sector, helping Main Street investors put their assets to work in Vermont, for Vermont.”
Since 1987, VCLF has loaned almost $95 million to local businesses, affordable housing developers and community-based organizations that has created or preserved 5,200 jobs; built or rehabilitated 4,000 affordable homes; created or preserved quality care for over 3,700 children and their families; and supported community organizations providing vital services to hundreds of thousands of Vermonters. VCLF loans are made possible by hundreds of community investors – individuals & families, faith-based groups, foundations, banks & corporations – who demand a social, “community” return along with a financial return. Learn more: investinvermont.org