|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Community
Lending
Services
Affordable Housing Program
A savings institution secured a grant of $268,300 from the Federal Home Loan Bank of Seattles Affordable Housing Program to reduce the interest rate on a 30-year permanent mortgage loan to a nonprofit developer building an apartment complex for low-income senior citizens. This reduced the overall debt service on the $2.6 million loan, enabling the developer to charge lower rents that would be affordable to individuals earning 60 percent or below of area median income. Additional funding sources for the project included equity from the sale of Low Income Housing Tax Credits and equity from the project developer.
The local grocery store owner in a rural community wanted to enlarge his store in order to accommodate customers and keep families from taking their business to neighboring communities. The store owner requested a long-term, fixed-rate loan from his local bank to finance the store expansion. The bank, in turn, secured a five-year, fixed-rate Advance of $400,000 to fund the 15-year loan. (It selected the shorter-term advance because it expected the loan to pay off before 15 years.) Since the store expansion would generate new jobs for lower- to moderate-income people, the bank accessed a reduced-rate advance through the Community Investment Program. This resulted in an interest rate that was approximately 15 basis points below the standard rate.
In a growing rural community, a nonprofit organization proposed building 24 units of multifamily housing and 56 units of single-family owner-occupied housing affordable to households earning 80 percent of area median income. The organization identified an 8.32 acre site, currently owned by a local bank as the result of a foreclosure. The bank agreed to sell the property and secured a $10,000 Challenge Fund grant to help cover predevelopment expenses, including environmental and geotechnical studies, and architectural and legal services. To demonstrate its support of the project, the local bank made a $1,500 contribution and agreed to pay for the site appraisal, valued at $1,500. It also committed 80 hours of staff time to assist with the overall planning and development.