Community Loan Fund

 
 

Established in 1993, the Community Loan Fund is a pool of over $4 million in contributions and capital investments that provides low-interest financing to individuals and organizations who develop affordable housing. As a Community Development Finance Institution (CDFI), WCHR's Revolving Community Loan Fund is focused on three types of lending:

Receivership Loans 

  • WCHR makes loans to court-appointed receivers for properties put into receivership by Massachusetts courts. Funds may be used for both hard (construction) costs as well as soft costs such as attorney fees, utilities, or insurance. Most of these loans are for six to twelve months and are interest-only. This specialty loan product is difficult to find commercially and generally allows for full restoration of badly deteriorated properties to full service. Most property that goes into receivership can be considered “naturally occurring” affordable housing.

Acquisition, Construction, and Bridge Loans for Affordable Housing

  • WCHR makes loans to cover construction expenses on affordable housing projects being developed by both non-profit and small business developers, with an emphasis on emerging developers operated by women and minority owners. These loans can fund construction and other direct costs by bridging the time between when vendors need to be paid and governmental or permanent mortgage funds become available, which may be several months if government funding programs are used. Depending on the scope of the project, these loans will generally run from six to twelve months in term and are interest-only during that period.

Gap Loan Financing

  • When working with non-profit or for-profit organizations, WCHR may be able to fill the final gaps needed for a rental housing project by providing lower debt service through the use of an amortization period that is longer than the loan term. In other words, we may be able to make a loan with payments based on a term of 20 years, even though the full balance of the loan may be due in a shorter timeframe.

 
 

More than 30 investors contribute to the Community Loan Fund to help improve the safety, sustainability, and quality of life within our communities. In addition to government funding, investors include nonprofit organizations, social investments, foundations, educational institutions, community banks, credit unions, religious institutions, individual investors, WCHR equity, and loan loss/ write-offs. Investment amounts, loan terms, and interest rates are tailored to the individual or organizational investor within WCHR's investment guidelines.

CLICK HERE TO DOWNLOAD OUR INVESTOR PROPOSAL FORM.

To discuss becoming an investor in WCHR’s Community Loan Fund, please click the button below and fill out the form, or contact Lora Baldracchi at loans@wchr.org or 508-799-0322, ext. 117 or Paul TonThat at 508-799-0322, ext. 114.

 
 
 

Community Loan Fund in Action: Recent Examples

 


Petersham Road, Hardwick

WCHR made an acquisition and rehab bridge loan to Father and Sons Properties, a small family-owned business, to purchase and rehabilitate this old farmhouse into three apartments. The building had been partially converted into a communal living situation for faculty at a local private school, but no permits had been obtained for the start of the construction work. The developer was able to buy the property at a good price because of its uninhabitable condition and quickly turned it around. It will be rented at affordable rents, one of the few such properties in this rural town.

Illinois Street, Worcester

This four-family building was owned by an emerging developer who had applied to the City of Worcester’s Affordable Housing program to create units with long-term affordability, obtaining $150,000 in federal Community Development Block Grant funds for utility, exterior, and interior finish improvements. WCHR provided a bridge loan to cover the gap between work being done and the funds being received. Under the terms of the CDBG funding, the units will carry a long-term affordability restriction of fifteen years.

Pleasant Street, Leominster

This property came under receivership after significant storm damage had made two of the four units uninhabitable. The owner did not have sufficient funds available for the necessary reinvestment. The receiver, a well-known local contractor, was able to obtain funding for both emergency repairs and longer term capital improvements that would prevent further flooding, The work was completed, the property sold at the receiver’s auction, and is now a stable example of “naturally occurring” affordable housing. WCHR’s loan commitment of $339,000 enabled the receiver to make complete structural repairs, major improvements to the plumbing and electrical system, and restore all units to habitability.