Sparks Tribune

Group looks to develop local affordable housing

By Angela Potter, Sparks Tribune
November 13, 2004

There may soon be more low-income housing and community facilities in Washoe and Storey counties, thanks to investors.

Charles Schwab Bank will invest $250,000 in the Nehemiah Community Reinvestment Fund. The investment will be used to make loans for affordable housing.

NCRF loans money to both non-profit and for-profit groups below market rate to help with projects that would benefit low-income areas.

These projects can be low-income housing developments, community centers or businesses, like a grocery store. Peggy Jones, director of NCRF, said the goal is to provide not just housing, but money and jobs for long-term growth.

"Some projects are focused on job creation as opposed to housing," she said. "There were places where the last thing they needed was more section 8 housing. They needed money in the area."

Jones said Washoe County was chosen both for its proximity to the Sacramento-based group and because it's a growing area with lots of potential.

"Reno is an important community," she said, "but there's some work that needs to be done there. Money needs to be available to do that."

Although there are not yet any specific plans for the money, Jones said she would be meeting with developers and marketing the availabilty of the funding as early as next week.

This is NCRF's first project outside California and Jones said they have been considering possible uses of the money for months.

"We've been talking to prominent developers in the area for several months in anticipation of receiving this money," she said. "We're confident it will go to a good cause."

Jones said the housing problem in Reno has been aggravated by the influx of Californians looking for more affordable housing. Ironically, this population growth has in turn increased housing costs in Nevada.

"It exacerbated what was already a need for quality, affordable housing in the area," she said.

The money could go to one group or several, depending on their proposals. Developers are encouraged to go through conventional lenders, like banks, first.

"Just because we're a non-profit doesn't mean we will loan to just anyone," she said. "They have to show they can't get the money anywhere else."

Jones called the money "gap money," meaning it will not fund an entire project, but provide additional capital as needed.

"That's how this relatively modest amount of money can make a large impact," she said. "There are projects that otherwise wouldn't be possible because that little piece is missing."

The money has a five-year term, and Jones said they hope to make back their loans and reinvest the profits at least once during that time.

There are benefits to working with a smaller group like NCRF, Jones said.

"We can take more risks and be comfortable doing it as a result," she said. "We have very few losses. We're a very hands-on, one-on-one lending service."

For example, NCRF may invest in a project earlier than a larger bank would. They are also able to tailor the terms of the loan to fit individual needs instead of rushing to foreclose, Jones said.

"We encourage borrowers to call us at the first sign of trouble," she said. "We're not interested in foreclosing on the project. When borrowers succeed, we succeed."

Charles Schwab Bank made an additional $25,000 grant to the Nehemiah Corporation which will most likely be used for down payment gift assistance.

The down payment assistance program targets families that can pay their bills but may not have money left over to put into savings, said Elizabeth Patella with the public relations department.

"These are families that have enough for monthly mortgage payments," Patella said, "but not enough savings when they become homeowners."

To date Nehemiah Corporation has provided $700 million in down-payment assistance gifts and has helped more than 180,000 families and individuals achieve their goal of home ownership.

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