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Acquisition/ Predevelopment Funds
In a city such as Los Angeles where scarcity of land creates steep competition for sites. The prohibitive acquisition costs and short escrow periods make it difficult for affordable housing developers to successfully compete for available sites. As a result, in 2007, the Los Angeles Housing Department (LAHD) created two acquisition programs to assist affordable housing developers to obtain capital quickly and efficiently for acquisition and predevelopment costs.
The LAHD along with Enterprise Community Partners created the New Generation Fund (NGF) and along with Corporation for Supportive Housing created the City of Los Angeles Supportive Housing Loan Fund (SHLF). The LAHD funds act as a loan loss guarantee to each program, enabling each program to provide below-market rates to developers of affordable housing.
New Generation Fund
The NGF is a revolving loan program that provides acquisition and pre-development capital for affordable housing projects. Eligible affordable housing projects can include either rental or homeownership units targeted to households earning at or below 150 percent of the Area Median Income levels established by the U.S. Department of Housing and Urban Development. The low-interest rate loans are to be repaid once developers qualify for permanent financing.
The City of Los Angeles NGF is modeled after similar programs created in Washington D.C. and New York City. Enterprise Community Partners, administrator of the NGF, is nationally recognized as a leading provider of development capital for affordable housing projects. ECP has established a local partner network of community based organizations and financial lenders.
The NGF supports the City’s Affordable Housing Managed Pipeline (AHMP) and promotes new loan transactions. In July 2015, LAHD received approval from the Mayor and City Council to renew a loan of $10 million from the City’s General Fund for a term of 10 years for the NGF. The purpose of the $10 million loan for the NGF is to cover shortfalls and to leverage approximately $50 million in private lending capital. Since its inception, NGF has loaned more than $68 million to 14 affordable housing developments, of which, eight projects have closed their NGF financing and produced 784 affordable units, and six projects currently in the pipeline will add 488 affordable units to the City’s housing pool. For more information, please visit https://www.newgenerationfund.com/
Supportive Housing Loan Fund
In 2008 the LAHD partnered with CSH (Corporation for Supportive Housing) to create the Supportive Housing Loan Fund (SHLF). SHLF is a revolving loan fund providing acquisition and predevelopment capital for supportive housing projects.
Since its inception SHLF has invested over $125 million in more than 55 projects totaling nearly 3,900 units of supportive housing, affordable apartments connected to services for the most vulnerable Angelenos.
In 2017 the fund expanded to $60 million thanks to the support of the City of LA, California Community Foundation, Conrad N. Hilton Foundation, The Kresge Foundation and Weingart Foundation.
SHLF supports the City’s Proposition HHH and the AHMP to spur the development of supportive housing throughout the City of LA.
For more information, please visit https://www.csh.org/csh-solutions/lending-community-investment/