2018 Loan Fund Success Story
There are many services that are needed in communities on Delmarva. But, where does the money come from to house these services? How do things like charter schools, libraries, drug treatment centers, health clinics and homeless shelters come to exist? And, what would our communities be like without them?
As a CDFI (Community Development Financial Institution), the NCALL Loan Fund has proven to be an essential component for financing facilities like these to benefit communities throughout Delmarva. The Loan Fund is able to do what traditional lending institutions cannot – provide tailored loans and lending solutions to those who need it most. More than a bank, the Loan Fund gives necessary guidance and support to its customers to help get projects off the ground.
In FY 2018, the Loan Fund helped to tackle a huge problem by financing three addiction treatment centers. According to former Delaware Attorney General Matt Denn, there are about 11,000 people in Delaware with substance abuse disorder, but only 200 supervised treatment slots. Making more treatment beds available is one way Delaware can strengthen its fight against the opioid epidemic.
In October 2018, Denn released his office’s fourth annual report looking at how the state is managing the crisis. In the past four years, about 1,000 Delawareans have died from drug overdoses, mostly as a result of opioids. “That is a number that I think about a lot,” Denn said. “Behind those numbers are a thousand personal tragedies suffered by our friends and neighbors. It is the public health crisis of our generation.”
In response to this epidemic, Gaudenzia, which provides its services in Delaware, Maryland and Pennsylvania, searched for a new site in Delaware from which it could provide its wide range of treatment options for men and women suffering from substance use disorder and mental illness. Gaudenzia found the perfect site for the location of a new treatment and recovery center in Claymont. Then came the tricky part. They needed to secure financing for the acquisition and construction of the facility. Gaudenzia had secured partial funding through a traditional source, Citizens Bank, but were searching for the more difficult to find subordinate financing. A consultant suggested that they contact NCALL because of the ability of the Loan Fund to underwrite projects such as this. According to David Slinger, Gaudenzia’s Director of Operations, “NCALL has been very helpful. We needed financing that would accept a second lien position and no other bank would do it. That saved this project!”
NCALL was able to make the loan and bring two other participant lenders in, NeighborWorks Capital and Partners for the Common Good. Other financing was provided by the Federal Home Loan Bank system and multiple foundations providing grant funding. David went on to say, “It has been a pleasure working with NCALL on this much needed project to address addiction and the opiate overdose problem. The closing went very smoothly and we look forward to working with NCALL on future projects.”
Gaudenzia's Claymont facility will house new programs: a residential treatment program for adults with co-occurring disorders (mental illness coupled with substance use disorder), and a safe housing program for sober women and their children. The women will participate in outpatient services at Gaudenzia's outpatient program located in the Claymont Community Center while residing in their sober living housing program.
The Loan Fund provided financing for three such facilities this past fiscal year.
About Loan Fund
NCALL's homeownership counseling helps households become mortgage-ready for conventional financing and special financing programs, such as FHA, VA, and Rural Development Section 502 mortgage loans.